Colorado Officials Seeing Mega Millions Riches, Too
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 would owe the state anywhere from several hundred thousand dollars in taxes for the next 26 years, to a single payment of more than $16 million worth of income taxes, according to an online tax estimator.
Those figures don’t include sales taxes from anything a winner might buy in Colorado, such as a luxury car or a mansion in Aspen.
A one-time $16 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 last year. And a winner would likely hire tax lawyers to find ways to reduce how much goes in the state and federal pocketbooks.
But $16 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 half that. This year Colorado’s bipartisan team of budget-writers are logging long hours debating smaller amounts.
One of the lead budget-writers, Republican Sen. Kent Lambert, joked before a marathon budget negotiation Thursday that lawmakers have joked 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 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 $500 million jackpot drawing.
“Sales are going to be very strong,” said Brooke Christopher of the Colorado Lottery. Exact numbers on increased sales weren’t available.
Last fiscal year, Colorado sold more than $25 million worth of Mega Million tickets, but had no jackpot winner. Last year all lottery products, from scratch-off games to multistate jackpots, generated more than $113 million.
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.
By Kristen Wyatt, AP Writer(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)