State treasurer says Lottery helps pay down major debt

DANVERS – Keep on gamblin’. Proceeds from the Lottery help the state pay its bills and provide funds for cash-strapped cities and towns.That advice was delivered Wednesday by State Treasurer Tim Cahill, who outlined the accomplishments of his office to an audience at Sheraton Ferncroft Hotel, where the North Shore Chamber of Commerce hosted an Economic & Public Policy Breakfast Forum.According to Cahill, the Lottery generated $3.7 billion in local aid during the past four years since he was elected treasurer. But the buzz over $1 million jackpots is no longer sufficient to titillate the gaming public. As a result, Lottery product sales are down by two percent over the past two years.Lottery officials are looking for ways to attract the casual player in an effort to increase revenues, he said, adding, “Two percent doesn’t sound like a lot of money, but if we don’t make that up, it will come out of the coffers of cities and towns.”The Lottery hauled in $4.5 billion last year from Keno, charitable gambling events and an array of more than 30 scratch tickets. Per capita, Massachusetts was unrivaled for how much people spent on state-sponsored gambling. Still, it wasn’t enough to pay the bills in a state where transportation costs have soared astronomically, mostly due to construction of the Big Dig highway and tunnel project.”We’re trying to broaden our appeal,” said Cahill, explaining that while a $200 million jackpot will generate ticket sales, a more modest amount will not. “People just don’t react as they once did to a $70 million jackpot.”Comparing the Lottery to Dunkin’ Donuts, he explained that the state office, which has 400 employees, does not sell its own products but depends on vendors to act as agents. Vendors keep 5 percent of the sales, which annually amount to about $35,000 per store. It can prove a profitable association. For example, Ted’s Mobil in Methuen sold $13 million in Lottery products last year, he said.Cahill acknowledged that not everyone approves of the state’s role in fostering gambling. However, as an elected politician, he has declined to enter the fray, stating only that the Lottery was established in the 1970s to offset rising property taxes.The treasurer, who lives in Quincy where he served six years as a city councilor, said his office has helped rescue the state from dire financial straits, but plenty of obstacles still exist.Besides the Lottery, the treasurer’s office devotes the bulk of its resources to overseeing state pension funds and assisting communities with school construction, he said.Some towns and cities have been unable to secure a healthy return on their investments. In such cases, the state should take over management of those assets, as the governor has proposed, Cahill said.The state investment fund overseen by Cahill’s office totaled $26 billion in January 2003, but has grown to $47 billion as of February 2007. “As our assets have gone up, our risk has gone down,” he said. “We all slept when the market crashed in February.”Cahill said his office has been criticized for making risky investments with pension funds. Those days are over, he said.”Our system is closer to being totally funded today that it has ever been,” he said, claiming 80 percent is far better than the 20-percent funding level of 20 years ago. “In the past three years, we out-performed most public pension funds.”The state pensions belong to 51,000 retirees and more than 88,000 state employees, including teachers.Throughout his presentation, Cahill made repeated references to the media, claiming journalists only report the bad news from his office. “You don’t read about the good things happening,” he said, citing for example the school construction reimbursement program formerly run by the state Department of Education and now overseen by his office as part of a special trust created by the Legislature.”When we took over, there were 420 schools on the waiting list. Another 700 schools were already in the pipeline,