States catch­ing lot­tery fever, too

Home­town win­ner means rev­enue when the tax man cometh

The Washington Times Daily - - Nation - BY ERIKA NIEDOWSKI

PROV­I­DENCE, R.I. | Peo­ple queu­ing up for Mega Mil­lions tick­ets aren’t the only ones sali­vat­ing over the record $540 mil­lion jack­pot that could be won Fri­day — some state gov­ern­ments strug­gling through lean times know a home­town win­ner could bring a tax bo­nanza.

Taxes on a lump-sum pay­ment op­tion to a sin­gle win­ner could mean tens of mil­lions of dol­lars of badly needed rev­enue that could go to re­store en­tire so­cial ser­vice pro­grams on the chop­ping block, pay for hun­dreds of low-in­come hous­ing units, fore­stall new taxes or hire more state troop­ers.

So many tick­ets have been sold that the jack­pot climbed Thurs­day to the largest in his­tory, ac­cord­ing to of­fi­cials in Rhode Is­land, one of 42 states where Mega Mil­lions is played. If a lone win­ner took the lump-sum pay­out on the jack­pot’s cur­rent amount, it would be an es­ti­mated $389.8 mil­lion.

“I’d love it if a Rhode Is­lander wins,” said Rep. He­lio Melo, chair­man of the House’s Fi­nance Com­mit­tee.

In Rhode Is­land, when the tax man comes call­ing for his 5.99 per­cent, that would mean an es­ti­mated $23.3 mil­lion, forked over in a sin­gle pay­ment.

With it, the state could pay for most of a $25 mil­lion bond for af­ford­able hous­ing that vot­ers may be asked to ap­prove this fall. It also could help Rhode Is­land reach its goal for aid to school dis­tricts for the first time. The state, which has a $7.9 bil­lion bud­get, is $22 mil­lion short.

States set their own tax rates on lot­tery win­nings. New York, for in­stance, charges 8.82 per­cent, while sev­eral states, in­clud­ing Cal­i­for­nia, charge noth­ing.

Ohio’s share of the lump-sum pay­out would be $23 mil­lion, hardly pocket change but still a frac­tion of the state’s $56 bil­lion two-year bud­get.

“We’re not hold­ing our breath wait­ing for a tax wind­fall for the state, but we will al­ways root for Ohio and Ohioans and hope lot­tery luck comes to a Buck­eye,” said Joe Testa, the state’s tax com­mis­sioner.

Con­necti­cut would get more than $26 mil­lion in state taxes from a win­ner who takes the lump sum. The money could be used to help fully pay for Gov. Dan­nel P. Mal­loy’s pro­posal to chan­nel more money to schools, state pol­icy Un­der­sec­re­tary Gian-carl Casa said.

It also could help get rid of re­cently im­posed sales taxes on non­pre­scrip­tion drugs, at a cost of $17.2 mil­lion, with money left over to hire enough state po­lice troop­ers to meet the statu­tory min­i­mum of 1,248, at a cost of $8.9 mil­lion.

Rhode Is­land al­ready has a tax wind­fall com­ing its way from two re­cent Power­ball wins. An 81-year-old Newport woman won the Feb. 11 jack­pot worth $336.4 mil­lion, and the win­ning ticket for $60 mil­lion jack­pot on March 7 was sold in the state.

AS­SO­CI­ATED PRESS

A cus­tomer col­lects Mega Mil­lions tick­ets bought at a liquor store in Moun­tain View, Calif., on Thurs­day, join­ing mil­lions of other Amer­i­cans dream­ing big ahead of the Fri­day night draw­ing for the big­gest lot­tery jack­pot ever.

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