Wednesday, February 10, 2016

Corbett: Spending Money to Make Money

Consultant fees are climbing on the pending effort to privatize state lottery management; this could prove problematic if the deal fails.

Corbett: Spending Money to Make Money


Gov. Corbett clearly believes in the old saying that you've got to spend money to make money -- even if it's not his money.

Take his once-rejected but still-pending deal to privatize management of the state lottery.

The Harrisburg Patriot-News reported this week that the administration has so far run up bills totalling nearly $3 million in consultant and legal fees to find a way to turn lottery management over to the British firm Camelot.

The newspaper says if the effort (already once rejected as unconstitutional by state Attorney General Kathleen Kane) fails, those fees come out of lottery profits.

It notes the amount is enough to:

  • Assist seniors in paying for 137,681 prescriptions through the PACE and PACENET programs,
  • Pay for 1.1 million free transit rides for seniors,
  • Provide 6,055 rebates through the state’s property tax and rent rebate programs, or
  • Cover 576 months of nursing home care, the equivalent of paying the tab for 48 people to stay in a nursing home for a year.

The administration contends if the deal goes through the money comes back in mega-multiples since Camelot says it can generate $3 billion more in lottery profits over the next two decades.

Democrats, of course, hate the deal and say Corbett's throwing good money at a bad idea.

The administration is in the process of tweaking it's original proposal to take another run at the AG in coming months to win a Camelot contract approval. Meanwhile, there is a lawsuit and an unfair labor practice complaint from the state workers' union to fight since the management deal could impact some current lottery employees.

So the issue's stuck in legal traffic -- while the meter runs.

Back in January, I wrote that Corbett's privatization plan offers both opportunity and risk.

The clear opportunity is the Guv could be seen as a forward-thinking leader protecting senior citizens in an aging state right before his reelection bid.

The clear risk is, if the plan isn't approved, he's lost a boat-load of public money on a bad private bet.

So far, at least, the risk is outweighing the opportunity. We'll see how that old saying holds up once the issue moves forward.

Daily News Political Columnist
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About this blog
John Baer has been covering politics and government for the Daily News since 1987. The National Journal in 2002 called Baer one of the country's top 10 political journalists outside Washington, saying Baer has, "the ability to take the skin off a politician without making it hurt too much." E-mail John at

John is the author of the book "On The Front Lines of Pennsylvania Politics: Twenty-Five Years of Keystone Reporting" (The History Press, 2012). Reach John at

John Baer Daily News Political Columnist
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