6:42 UPDATE: The Tribune has already published its editorial about the plan.

…If education were the only concern, the governor’s priorities would, on balance, be winners. We wonder how he’ll get jealous communities to consolidate school districts, or teachers unions to go along with merit pay. But his list of wishes includes many that this page supports.

We suspect that what drives this plan isn’t education, it’s politics. If this proposal were such a swell idea for Illinois, Blagojevich would have proposed it for this spring’s legislative session. Instead it surfaced only after Meeks threatened to run for governor. A Meeks candidacy could have siphoned off enough Democratic votes to throw the governorship to Republican challenger Judy Baar Topinka.

Meeks said he would back off only if Blagojevich offered a big education funding plan. Voila! A big education funding plan from the governor!

But Blagojevich has a political price to pay as well: At first blush, this plan does nothing to address fast-rising property taxes that enrage many voters. And it appears that relatively few of its benefits would go to the suburban school districts that state funding already short-changes. Blagojevich may have just torpedoed the suburban support he’ll need against Topinka.

If Illinois schools receive more funding, some of it should go to teaching the rudiments of economics. That’s where this plan really falls short. Blagojevich argued Tuesday that accountability is a big part of his plan. But mostly it’s about spending more money. As is, many Illinois school officials (especially Downstate) cry poor rather than convince their property taxpayers to shoulder a heftier burden. They cry poor rather than consolidate districts to shrink the number of highly paid local officials. They cry poor rather than show anyone that their real priority is spending smarter, rather than spending more.

Blagojevich has shown that he knows how to hold down a payroll, kill obsolete programs and streamline or consolidate the business of government. That, Governor, was a show of leadership. This, by contrast, is the thinking we’ve seen too often from your administration: relying on future generations of Illinoisans to pay for decisions that are politically popular today.

6:05 UPDATE: AP: Blagojevich lottery plan raises big money and big questions.

6:00 UPDATE: Larry has some thoughts about the merits of the policy end. Fran discusses the morality of the idea. OneMan crunches some numbers and looks at some perils.

5:40 UPDATE: The raw tape of the announcement can be found here.

4:04 UPDATE: A Blagojevich spokesperson just told me that no special session will be called. “Everything will run in veto.”

4:00 UPDATE: Here’s a PowerPoint presentation from the guv’s office. There appear to be more details in this PowerPoint than in the press release, but you have to look for them.

3:50 pm UPDATE: The Illinois Federation of Teachers is taking a wait and see approach towards the governor’s proposal.

We believe that any rush to judgment on this important issue would be a mistake. Thorough analysis and discussion from independent organizations such as the Educational Funding Advisory Board (EFAB), the Center for Tax and Budget Accountability and A+ Illinois can provide valuable insight on this proposal. Once this plan has been thoroughly studied, we believe the appropriate decision can be made on how best to move forward.

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IMPORTANT UPDATE: The governor’s office has just released some details. Click here for the txt file, or click here for the online press release.

UPDATE: The AP fleshes it out a little more.

UPDATE: The AP has a list of highlights here.

UPDATE: Statement from Congressman Jesse Jackson, Jr.

Congressman Jesse Jackson, Jr., today said, “Every student, parent and citizen in Illinois should thank Reverend and State Senator James Meeks for dramatically raising the issue of adequately and fairly funding public education in Illinois. Only time will tell if the Governor’s plan is both innovative and effective because the devil is always in the details. However, I am hopeful that all Illinois children will soon reap the full crop of educational blessings that the Governor is promising through the economic seeds he is planting today.

“This education plan is a public/private partnership - using a public asset to attract private funds in order to gain extra money for public education. If such a partnership is good enough for the kids, then it’s good enough for their parents. Leasing state-owned land to a legal airport authority (ALNAC), so ALNAC can contract with private developers to build an airport and create thousands of new jobs, is just as valid. All we need is the Governor’s signature. He can immediately unlock over $300 million of private investment in Illinois and create 15,000 new jobs at no risk to taxpayers. As the Governor said today, `when you know in your heart what you’re doing is right, the rewarding part of the job is you go out and you just do it’,” Jackson concluded.

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I’ll be updating this post throughout the afternoon, so keep an eye on it.

Crain’s starts us off.

The governor’s plan, to be formally unveiled at a press conference this afternoon, will call for either leasing the Lottery to a private operator or selling it, perhaps by offering stock in an initial public offering (IPO). Sources familiar with the plan said that would pull in an estimated $10 billion, one-time payment.

The state would take about $4 billion of that money for extra school spending in the next four years. That $4 billion would be divided among school construction, pre-school education, more money for special education and a general increase in the “foundation level” that all public schools receive.

The remaining $6 billion would be saved, invested and generate a guaranteed $650 million a year for schools over the next two decades, according to sources familiar with the proposal.

The Lottery now generates about the same amount for the state, $650 million a year, but some of that money has been pulled off to pay for other state spending.

UPDATE: A Michigan think tank figured three years ago that the sale of that state’s lottery would bring in just $1.3 billion to $2 billion.

UPDATE: Krol has some good questions about the plan here.

· How does the private company that leases the lottery plan to actually turn a profit? Will it reduce prize payouts? […]

· Has the governor already figured out which he company he wants to take the lottery off his hands? […]

· How does the governor ensure the “new lottery money” is added to the budget as extra school funding money and that lawmakers don’t pull another shell game? […]

· What about the other lottery games, like the special lottery tickets benefiting breast cancer research or military veterans? What happens to that cash already earmarked for special purposes?

UPDATE: AP:

The plan includes $1.5 billion for school construction and calls for performance pay for teachers and the consolidation of school districts, according to an individual familiar with the plan who requested anonymity because the proposal has not been formally announced.

The state also would increase the “foundation” level — the guaranteed minimum state spending on each student — by $250 million in the plan’s first year, although a per-child breakdown was not immediately available. The current state budget would raise the level to just $5,334 for each student, instead of the recommended $6,405.

UPDATE: Back when the governor did his $10 billion pension bond scheme, his expected rate of return on the invested money was just 8.5 percent. This time, it’s much higher.

UPDATE: Topinka calls it a “scam“

The Republican candidate in the governor’s race says Governor Rod Blagojevich’s education funding proposal is “a scam.”

State Treasurer Judy Baar Topinka says selling the Illinois Lottery wouldn’t help improve education and would end up costing the state money in the long run. […]

Topinka today also criticized the proposal as a hastily constructed plan designed to keep state Senator James Meeks out of the governor’s race.