Kane Delay on Lottery Could Cost Taxpayers (Again)

The Patriot News reports that private lottery manager Camelot Global Services may not be willing to extend its bid beyond the current expiration date of Saturday. Attorney General Kathleen Kane has 30 additional days to review the contract, after submitting a series of questions (which have not been made public) to Gov. Corbett.

Unfortunately for taxpayers, this delay could jeopardize $34 billion in profits that Camelot has guaranteed for the state. Camelot’s guarantees would generate at least $3 to $4.5 billion more than current Lottery projections—including $50 million for this year’s budget. These guarantees would be lost if incessant delays push Camelot to withdraw its bid.

This may sound familiar. In 2008, Pennsylvania had the opportunity to realize $12.8 billion in up-front payments for leasing the Pennsylvania Turnpike. But lawmakers refused to act on this opportunity, instead opting to empower the Turnpike Commission via Act 44.

As a result, Turnpike tolls have increased 71 percent for cash drivers and 35 percent for E-ZPass customers since 2008. Tolls are set to climb another 3 to 5 percent every year for the next 15 years. The Turnpike Commission has continued its history of wasteful and extravagant spending.

Instead of earning interest on a lease payment, taxpayers are paying interest on Turnpike debt, which now exceeds $8 billion (a $3.5 billion increase in just four years). This debt burden is so onerous, former Auditor General Jack Wagner suggests the Turnpike Commission could be bankrupt in a few years.

Moreover, despite these toll hikes and borrowing, lawmakers are back at the drawing board, trying to come up with even more funding for transportation. 

For the sake of taxpayers, let’s not repeat mistakes of the past.