First, the Indiana Toll Road. Now, the Indiana Lottery

From an article in today's Indianapolis Star:

12:26 PM December 13, 2006
Lottery lease might bring in $1 billion

A top House Republican says leasing out the Hoosier Lottery could generate a one-time payment of around $1 billion...That money would go toward funding higher education initiatives, such as scholarships and professorships.

In addition to that payment, Indiana would keep some of the lottery's annual revenues, which presently help fund pensions for teachers, firefighters and police and provide relief from auto excise taxes. Lottery distributions to the state totaled $189 million in fiscal 2005. The arrangement would allow the state to collect the one-time windfall, while continuing payment for pensions and the auto excise tax, Espich said.
Copyright 2006 IndyStar.com. All rights reserved

Let's assume we annuitize this, with a 5% rate of return on the remaining principal. Then to generate the current $189 million annual lottery revenues, we'd run out of money in, um, 6 - 7 years.

And then? How would we plan to replace that $189 million in the state's budget? OK, there's supposed to be some ongoing revenue flow, but how much?

I could make sense of the lease of the toll road, but, right now, this makes no sense whatsoever. (Of course, replacing the lottery with a less-regressive way of raising revenue for the state would be an even better idea...like that'll ever happen.)

UPDATE: It's worth noting that proposals to "earmark" one or another revenye stream for education (or almost any other specific expenditure type) rarely generate much new spending. Almost always, the legislature sooner or later (usually sooner) concludes that we've provided a dedicated revenue stream for education (or whatever), so we can cut back on our other appropriations for education...