State Treasurer John N. Kennedy on Wednesday told a Louisiana House panel that plans are afoot to sell the state’s lottery, which the Jindal administration denies.
Kennedy points to two recent presentations by investment banks that outline a deal that could quickly raise almost a half billion dollars for state government.
Commissioner of Administration Kristy Nichols said the Jindal administration didn’t entertain the idea of selling the Louisiana Lottery and won’t pursue it. Financial groups always come up with ideas to raise revenues, but this is one that the governor’s budget drafters didn’t accept.
“There are things they shop around, but it’s not something we have deliberated,” Nichols said in an interview after the hearing. “It’s bad information as far as I’m concerned.”
“I take them at their word,” Kennedy said about Nichols comments during an interview later in the day. “I do know for a fact that it has been under serious consideration.”
Kennedy said coming on the heels of a move to sell the remaining portion of the tobacco settlement, news that the Jindal administration was also looking at the Louisiana Lottery gave rise to his concerns. The Jindal administration has used money from various funds.
“Next step is going to be a reverse mortgage on the Capitol,” Kennedy told the Louisiana House Committee on Appropriations, which is reviewing Gov. Bobby Jindal’s proposed budget for the fiscal year that begins July 1.
CitiGroup Global Markets Inc., the securities arm of the behemoth Citigroup bank in New York City, stated in its March 2015 report that selling the Louisiana Lottery “could bring significant upfront value to the State” and provide “General Fund relief.”
Basically, the way it would work, according to the presentation by Goldman Sachs, an investment banking firm based in New York City, the state would receive an estimated $467.7 million in a lump sum from the sale of bonds that guaranteed with the future profits of the Lottery.
CitiGroup and Goldman Sachs pointed out that Florida, West Virginia, Arizona and Oregon are among the states that have done this.
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