In a move which was as unexpected as it is controversial, California governor Arnold Schwarzenegger is set to raise up to $15 billion over the next three years by selling bonds linked to the State Lottery. The move is a desperate attempt to shore up a budget shortfall which has been estimated to be as high as $20 billion by many experts. So how will it work?
In essence the bonds will be sold against the expected future receipts of the State Lottery which means that income for the next three years from the Lottery will be used to pay back investors. While the deal makes sense and has been welcomed in some quarters, many residents of California are concerned that gambling is fast becoming a major part of State funding, when taxes and other income should be more than enough.
There is also concern that the current State Authorities are spending way beyond their means and selling future administrations down the river. A number of groups who are opposed to gambling have also suggested that this is just the tip of the iceberg and expect similar deals to be announced across the country. In many ways it is a case of “giving with one hand and taking with the other”.
In a move which was as unexpected as it is controversial, California governor Arnold Schwarzenegger is set to raise up to $15 billion over the next three years by selling bonds linked to the State Lottery. The move is a desperate attempt to shore up a budget shortfall which has been estimated to be as high as $20 billion by many experts. So how will it work?