While the Pennsylvania Lottery has been increasing revenues, its current fund beneficiaries are rapidly increasing.  At the current rate, the lottery fund is projected to be $70 million in deficit in the next fiscal year.  Projections going forward only promise even more significant deficits.

Vicki Hoak, CEO of the Pennsylvania Homecare Association, said, “We’ve been hit by the tsunami.  We’ve started seeing this big increase in people looking for help.”

While the lottery has reached levels of ticket sales, topping $4.1 billion last year, $1.1 billion of that going to senior programs, the costs of the programs are increasing faster than the revenues are increasing.

At issue with the Lottery fund is the decision to use some of the fund to offset rising costs of Medicaid.  House Appropriations Committee Chairman Stan Saylor, R-York County, stated, in regard to that decision, “We knew we couldn’t continue funding everything out of lottery that we do.  There’s also a lot of discussions about different games to increase revenue. Those are all things we’re going to take a look at.”

The Chairman outlined a plan called the “reinventing government initiative,” that is aimed at making decisions on what lottery revenues should fund, what should be cut, and how to make existing services more cost-efficient.

Senior citizen advocates want the Lottery revenues to stop funding Medicaid programs and Department of Aging administrative costs.  However, they did not acknowledge how the state meets those shortfalls.  Either way, whether the state offsets funding deficits in programs the Lottery revenues had originally funded, or funding deficits in programs the Lottery revenues later funded, the deficits still remain.

The 65 and older population currently comprises 17 percent of PA Citizens, with that projecting to balloon to 25 percent by 2030.  In addition to the increase in percentages, people are living longer life spans.

“When people live longer, there tends to be more frailties that occur” and more likely to need lottery-funded services, said Rebecca May-Cole, executive director of the Pennsylvania Association of Area Agencies on Aging.

State Budget Secretary Randy Albright said in a recent interview, “I don’t want to get ahead of ourselves since those discussions are ongoing but by the time we get to our February 7 budget address, you’ll hear the governor talk about further steps in that regard.”

He added that the governor’s office is looking at ending relying on lottery revenues to help fund nursing fund and Medicaid expenses of eligible seniors.

“We have to obviously consider a whole list of options,” Albright stated, but, he added, “the governor is not interested in reducing services to seniors or reducing eligibility for seniors.”

Either way, whether PA Lottery revenues are switched to meet one state obligation or another, at current and projected entitlement liabilities it is likely that the state will face three possibilities, cut programs, streamline programs to be more cost effective, or raise taxes.

No matter how the PA Lottery Fund is utilized, these decisions will have to be made in the foreseeable budgets coming out of Harrisburg.