Gov. Chris Christie's administration has quietly put out a request for proposals to privatize parts of the state lottery.
We think privatizing the lottery is a monumentally bad idea. A lot of people do. Which is probably why the governor - who puts out a constant stream of press releases and videos trumpeting his every move - hasn't even bothered to officially announce that he wants to privatize the lottery. He know this isn't going to go over well - and for good reason.
Privatization of public functions rarely works. How can it? The private entity taking over the government function must deliver the service at less cost to taxpayers and make a profit. The projected savings to taxpayers rarely materialize. (Look no further than last week's report by the Office of the State Auditor on the Motor Vehicle Commission's contract with Parsons Environment & Infrastructure Group to conduct auto inspections; the state promised $12 million in savings when it eliminated safety inspections but never cut the Parsons contract enough to generate the savings.)
As columnist and former Slate.com editor Michael Kinsley has said, "Privatization cannot work. This is a mathematical certainty, not an opinion."
Under the request for proposals the Christie administration has issued, the state would get a one-time upfront payment of $120 million for turning over game development, ticket supplies, marketing and maintenance of the gaming system to a private contractor, according to NJSpotlight.com.
The state would also get the 30 percent of lottery revenue that state statute requires be used to fund state institutions and education ($950 million in the last fiscal year). But the private contractor would get up to 5 percent of the lottery's net income each year, assuming it meets certain performance standards.
All of which brings to mind Warren Buffett's famous remark that if he can't do the numbers for a deal in his head, he's not interested. In other words, the more complicated a deal is, the less likely it is to succeed.
The idea is that the private contractor would grow the total pot of lottery revenue, but that sounds to us like the kind of wishful thinking that so often underlies privatization proposals. Where's the evidence for it? The state already does a good job marketing the lottery - and, by the way, spends less than 1 percent of lottery revenue on administration.
Convenience store owners (who fear they will lose revenue from ticket sales), state lottery workers and Democratic leaders in the Legislature are lining up to oppose the privatization proposal.
Each group has its reasons. But the best reason to oppose this idea is an old one: The New Jersey Lottery isn't broken. It's one of the most successful state lotteries in the country. Don't "fix" it.