Colo. officials seeing Mega Millions riches, too
March 30, 2012
DENVER (AP) — Lottery players aren’t the only ones in Colorado seeing dollar signs in the record-setting Mega Millions jackpot.
State budget-writers could also benefit from an unexpected windfall. A lone winner Friday from Colorado, one of 42 states when Mega Millions is played, would owe the state anywhere from several hundred thousand dollars in taxes for the next 26 years, to a single payment of more than $18 million worth of income taxes.
Those figures don’t include sales taxes or property taxes from anything a winner might buy in Colorado, such as a luxury car or a mansion in Aspen.
So many tickets have been sold that the jackpot climbed Thursday to the largest in history. If a lone winner took the lump-sum payout on the jackpot’s current amount, it would be an estimated $389.8 million.
A one-time $18 million income tax windfall wouldn’t make a big difference to Colorado’s $7 billion budget. Individual income taxes alone last year totaled nearly $4.5 billion. And a winner would likely hire tax lawyers to find ways to reduce how much goes in the state and federal pocketbooks.
But $18 million isn’t a sum to sneeze at, either. Last year Colorado officials decided to close a state prison in southeast Colorado, the former Fort Lyon Correctional Facility, to save less than half that. This year Colorado’s bipartisan team of budget-writers are logging long hours debating smaller amounts.
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One of the lead budget-writers, Republican Sen. Kent Lambert, joked before a marathon budget negotiation Thursday that lawmakers have talked about gambling to solve the state’s budget woes.
“We’ve joked about going to Blackhawk and putting it on number seven,” Lambert said, referring to one of the state’s casinos. “We argue about which number.”
On a serious note, Lambert said the Mega Millions jackpot wouldn’t solve Colorado’s budget woes. The state is seeing increased tax receipts this year because of a rebounding economy, but the state is still producing less in taxes than it did before the Great Recession began in 2008.
Lambert said it can also be argued that the Mega Millions jackpot brings some adverse economic impacts on the state, because most will spend money on tickets that yield nothing.
“You have to look at the economic opportunity cost here. People buying tickets are taking that out of the economy,” he said.
Colorado Lottery officials say sales are brisk in advance of Friday’s $540 million jackpot drawing.
“Sales are going to be very strong,” said Brooke Christopher of the Colorado Lottery.
Colorado Lottery spokeswoman Heather Black said that as of 3 p.m. Thursday, Colorado had sold some $3.5 million worth of Mega Millions tickets since Sunday.
“It’s not a record week at the moment, but I suspect that by the drawing tomorrow evening it will be,” Black said.
Last fiscal year, Colorado sold more than $25 million worth of Mega Million tickets. Colorado joined Mega Millions in 2010 and has yet to notch a jackpot winner. In the last fiscal year, the state had $518 million in sales of all lottery products, from scratch-off games to multistate jackpots, generating more than $113 million to support Colorado parks and recreation.
The largest Colorado recipient of lottery sales revenue is the Great Outdoors Colorado Trust Fund, which received $56 million last fiscal year for open space and environmental preservation.
Smaller amounts also go to Colorado Parks and Wildlife and to a fund to build and maintain public schools.