Money Runs Out, Then What?

Published August 1, 2006

Illinois Gov. Rod Blagojevich (D) has said he would use $4 billion of the estimated $10 billion proceeds from his proposed sale or lease of the Illinois lottery over four years to boost school operating funds, build and repair schools, expand preschool programs, and buy new textbooks.

The remaining proceeds would be invested, and principal and interest would be drawn down and paid out to the schools until the money was exhausted, which is expected to be in 2024. The state’s public schools would receive $650 million each year until then. The $650 million annual payment is the amount the Blagojevich administration estimates the lottery would generate for the state’s schools this fiscal year if the lottery stayed in the state’s hands. After 2024, there would be no more lottery money for the public schools, as the lottery would be in private hands.

Speaker Calls for Study

Illinois House Speaker Michael Madigan (D-Chicago) on May 30 sent a letter to state lawmakers calling for an “in-depth review” of the governor’s plan.

The letter said lawmakers need answers from the governor regarding the “four-year cliff,” when the $4 billion in spending would end, and the “15-year cliff,” when the annual $650 million in school funding would end. Madigan’s letter also questioned several other items, including:

  • the state’s readiness to take over chronically failing schools;
  • which schools stand to benefit the most from the plan; and
  • whether the lottery operator would be permitted to expand gambling in the state.

— Steve Stanek