Lottery Figures Down: Tough Times Ahead for Cities and Towns

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Did anyone notice the story that ran in the Boston Globe last Friday about the deficit in the lottery revenue account? Probably not. They ran the story on Friday so that no one would notice.

This is going to be a huge problem for cities and towns as they try to come up with FY 09 budgets during this winter.

Sal DiMasi stated that the lottery revenue for this year was $120 million off pace. He also stated that he was going to press Treasurer Tim Cahill for an answer as to why this happened and whether or not it is a signal of a downward trend in the future.

The article also stated that lottery officials chimed in to say that they estimated lottery income a lot lower than the legislature did this year.

What does all this mean? Trouble. That’s what it means.

1. Cities and towns rely on two main sources of revenue to fund their governmental operations on the local level: local real property taxation and state “aid”. A pass through of Lottery revenue is one of the largest components of state “aid” given from the Commonwealth to the local towns. I put “aid” in quotes, for the legislature is merely giving back to us some of the money that we pay to it, so it is neither the state’s money to begin with, nor is it “aid”. But, that is what it is commonly called, so I will call it “state aid”.

2. When revenue to the state goes down, so too will the revenues to the local governments. Already the state has failed to live up to its obligations to fund public education in this state. Now they are going to fail to return lottery revenue to local governments as it promises as well. This is going to force town and city governments already strapped for cash to cut services and lay off employees. It will not be pretty.

3. This is Sal DiMasi’s way of puting a stick in the eye of those who favor casino gambling in this state. DiMasi is coming up with yet another deficit that will not be made up by the anticipated $450 million increase of revenue that they believe casinos will bring to the state. With lottery down $120 million and the state’s transportation budgets overburdened, the casino plan is looking less and less like a cure all plan and perhaps more problem than it is worth. The other shoe to drop here will be when they finally get around to noticing that because the economy in this state is horrible right now, that their income, sales, meals and hotel tax revenues will be off too. Then how will they balance the budget?

4. It is interesting to note that the lottery officials have commented upon the fact that the legislature intentionally ignored their revenue projections this year in favor of their own more rosey view. This means that the legislature is spending money that it does not have.


Forget about gay marriage and immigration. It is the economy, stupid! 

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