Thanks to the proceeds from the Pennsylvania Lottery, the commonwealth is able to offer very generous benefit programs to senior citizens at little cost to taxpayers, which has contributed to Pennsylvania's status as the No. 4 choice in the nation for senior citizens to reside.
Unfortunately, our programs for a growing senior citizen population have been put in jeopardy by stagnant returns from the lottery, and it is clear that something must be done to safeguard the benefits on which older Pennsylvanians rely.
The Pennsylvania Lottery provides more than $1 billion annually for pharmaceutical assistance, area agencies on aging, senior centers, in-home services, shared-and free-ride programs, the Property Tax/Rent Rebate programs and long-term living services. As our senior population increases, we also must see growth in the lottery fund to fully cover all eligible participants.
In eight of 20 years, the lottery has seen negative profit growth. According to a bipartisan report by the Legislative Budget and Finance Committee, the lottery fund eventually will be unable to meet its obligations.
If we do not find innovative ways to boost lottery revenue, the commonwealth could be forced to either cut programs for senior citizens or raise taxes to support them.
We need to find a way to head off these scenarios.
Gov. Tom Corbett is considering a plan to increase Pennsylvania Lottery revenues by entering into a private management agreement with Camelot Global Services, which is expected to deliver 20 consecutive years of profit growth for programs benefiting senior citizens.
This is not a proposal to privatize the lottery.
According to the governor's office, his lottery plan would guarantee more than $1 billion in additional funding for senior programs in the first five years and another $5 billion over the life of the contract.
These numbers are not mere projections, but they are firm commitments from Camelot, which would be required to pay any shortfall on the contract and has already offered $200 million in collateral.
Another promising aspect of the deal is that Camelot does not receive any revenue unless it exceeds its commitment. If after 20 years, programs for senior citizens have received only an additional $5 billion, Camelot will not make any money on the deal.
The plan will offer much more promising returns than the status quo.
Over 20 years, the compounded growth of the lottery fund has been only 2.4 percent. The plan to contract with Camelot will double these earnings and will help us to avoid tapping the state's general fund to provide for senior citizens' benefits.
We need to find a solution to adequately fund our programs for senior citizens in the near future. When I hear about the waiting list for in-home services in York County or witness the underfunding of our senior centers, it greatly upsets me. The governor's plan could be the catalyst to increase York County's aging funding and permanently fix the egregiously unfair aging funding formula.
I applaud the governor for opening the dialogue about modernizing our lottery fund to preserve programs for senior citizens and allow them to age with dignity. After all, it would be easier to do nothing than to address the real needs of Pennsylvania senior citizens.
I ask citizens of York County to learn the facts about the plan by visiting my website, www.RepGrove.com, for more information.
-- Rep. Seth Grove, R-Dover, represents the state's 196th District.