Amid fiscal troubles, Alaska eyes lottery

JUNEAU, Alaska — Alaska, long-reliant on oil and in search of options amid a persistent budget deficit, may turn to the lottery for help.

Republican Gov. Mike Dunleavy has introduced legislation proposing a lottery. His administration said it could serve as part of his goal of providing greater fiscal stability.

It comes on the heels of deep budget cuts Dunleavy proposed last year that were met with public outcry. That anger helped fuel a recall effort against him now tied up in the courts. His budget proposal for the upcoming fiscal year backs off deep cuts but would draw heavily from savings, which legislative leaders say is unacceptable. Lawmakers blew through billions of dollars in savings struggling with how to address a deficit that has persisted amid low to middling oil prices.

Estimates for what a lottery might generate vary with the kind of games that would be allowed, and it would take time for a lottery corporation to be set up. The administration estimates draw games only could generate around $5 million to $10 million a year for the state. It expects that number would grow if additional games were added.

Response from lawmakers has been mixed. Some see the potential new revenue as a plus, while others are critical of what they see as a lack of an overall fiscal plan from Dunleavy.

“It still doesn’t solve Alaska’s fundamental fiscal problem,” Juneau Democratic Sen. Jesse Kiehl recently told reporters. Kiehl has advocated for changes to the state’s oil tax structure and a broad-based tax, like an income tax. The state has no personal income or statewide sales taxes.

Dunleavy and House Majority Leader Steve Thompson have each proposed a lottery bill this year.

Dunleavy’s bill would establish a lottery corporation that would be able to conduct any kind of lottery game, including in-state and multistate draw games, such as Powerball or Mega Millions, scratch-offs, sports betting, and games through use of any media, including electronic terminals, according to the administration.

The bill from Thompson, a Fairbanks Republican, would allow for a state lottery and participation in a multistate lottery but not allow a lottery board to authorize such things as scratch-off ticket games or video lottery terminals.

Dunleavy’s bill proposes money in a lottery profits fund be aimed at an education endowment fund and programs to address domestic violence, drug abuse, senior services, foster care and homelessness.