SACRAMENTO — Gov. Arnold Schwarzenegger's plan to borrow against $15 billion in future lottery profits was supposed to be an easy sell, a relatively painless way to help bail the state out of its financial mess. Instead, it is quickly becoming a political liability.
Voters are suspicious of anyone messing with state lotteries, and they're emotional about it. The only other topic they're as eager to offer opinions about is sex, according to the national firm Independent Lottery Research, where some of the partners have conducted market research on consumer issues for decades.
"Everyone thinks they have some ownership of the state lottery," said Michael Jones, a director of the firm.
Californians find the governor's lottery strategy so distasteful, a recent state poll suggests, that they would rather have their taxes raised. Meanwhile, lawmakers are denouncing the plan as a gimmick, and analysts say it could prove far costlier to the state than Schwarzenegger is letting on.
Voters would have to approve the governor's proposal. But Mark Baldassare, president of the Public Policy Institute of California, said they meant it when they approved the lottery by ballot measure two decades ago to raise funds solely for schools.
"They don't see it as money to move around and use for other purposes," he said.
Administration officials are adamant that schools, the beneficiary of the lottery, would not lose money. Still, the institute released a poll Wednesday showing that only 30% of likely voters support the lottery borrowing (with 8% undecided), while 57% back the 1-cent sales tax increase that Schwarzenegger is grudgingly proposing as a backup if the lottery plan falters.
California's lottery is one of the more outdated in the country. And last month lottery officials reported that sales were $275 million below projections for the fiscal year ending this month.
Annual ticket sales in the state average $91 per person; the national average is $185. Schwarzenegger contends that adding games, placing electronic ticket machines in big-box stores like Target and making other unspecified improvements would double sales in five to 10 years, producing more than $3 billion a year in new sales. The state would then borrow against the higher revenue to generate $15 billion in instant cash.
