INDIANAPOLIS - The state Senate has narrowly passed Gov. Mitch Daniels' proposal to privatize the Hoosier Lottery to raise $1 billion for college scholarships and life-sciences research this afternoon.
Senate Bill 577 was approved today by a vote of 27-20.
The bill called for leasing the state lottery to a private operator for 30 years, in exchange for a $1 billion upfront payment and $200 million a year in annual payments. The bill would offer scholarships to college students who agree to stay in the state after graduation, fund life-sciences research, and meet police and fire pension obligations.
The bill's author, state Sen. James Merritt, R-Indianapolis, told senators the proposal would stem the state's brain drain, and keep its best-educated graduates in Indiana. The lottery operator would be regulated like the state's riverboat casinos and pari-mutuel horse tracks, Merritt said. "I believe this is a quality proposal," Merritt said.
But during lengthy debate today, several senators, both Republicans and Democrats, went to the microphone to announce their opposition to the proposal.
State Sen. Lindel Hume, D-Princeton, expressed skepticism whether a private entities would be able to turn a profit operating the lottery, making the lease payments the bill would require. "Why would anyone in their right mind pay us a billion-plus dollars to operate this thing for 30 years, with all the restrictions we have built into it?" Hume told senators.
Among Southwest Indiana legislators, senators Hume, Richard Young and Bob Deig, all Democrats, and Sen. John Waterman, a Republican, voted no. Sen. Vaneta Becker, R-Evansville, voted for it.
During debate on the bill, Hume posed questions to Merritt, the bill author.
"You indicated that the reason we would want to do this is because a private entity could operate this more efficiently," Hume said. "I have some real concerns that we're simply saying that the administration of the state does not have the ability to make sure this is administered as efficiently as it could be. Is that what we're saying?"
"I'm saying a private entity has software and the equipment and the wherewithal to operate it more so as a business than we could as a state," Merritt responded.
The bill now goes to the Indiana House for consideration.