Senior citizens may stand to pay a substantial cost in lost services if Gov. Tom Corbett's effort to privatize the Pennsylvania Lottery's management goes nowhere.

Cost of legal and financial consultants for Gov. Tom Corbett's lottery management privatization effort are enough to provide 6,055 rebates through the state's property tax and rent rebate programs, based on the Department of Revenue's most recent data that shows the average rebate is $470.62.

Already, the costs of the consultants hired to assist the Corbett administration in that endeavor exceed $2.85 million, said Elizabeth Brassell, a spokeswoman for the Department of Revenue, which oversees the lottery.

Unless another funding source is found, that money will come out of the lottery profits that are used to pay for senior programs, she said.

To understand the impact that would have if it came out of the lottery fund, information available from the state indicates that $2.85 million is enough to:

Assist seniors in paying for 137,681 prescriptions through the PACE and PACENET programs,

Pay for 1.1 million free transit rides for seniors,

Provide 6,055 rebates through the state’s property tax and rent rebate programs, or

Cover 576 months of nursing home care, the equivalent of paying the tab for 48 people to stay in a nursing home for a year.

Brassell said the consultants' tabs could grow even higher as the administration continues to explore ways to salvage the contract with United Kingdom-based Camelot Global Services PA, LLC, that Attorney General Kathleen Kane rejected in February.

Kane said the contract was unconstitutional and ran counter to state laws. But that didn’t deter Corbett.

Instead, he ordered his team to negotiate an extension on Camelot's bid through June 30 and try to revise the contract to address Kane's concerns without having to rebid the project.

The administration has touted the lottery management privatization as a way to generate $3 billion more for lottery-funded programs for a growing senior population over the next 20 years than the current public management would raise. By 2030, one in 4 people will be over the age of 65, according to Department of Aging.

If a contract with Camelot were executed, the private lottery manager would pick up the consultants’ fees. Brassell said that possibility should not be ruled out just yet.

But as it stands now, the commonwealth would be stuck paying the tab.

Senate Democratic Leader Jay Costa, D-Allegheny, is concerned about the rising costs that will grow the longer the Corbett administration spends trying to address the attorney general’s concerns.

“This is throwing good money after bad at the expense of our seniors,” Costa said. “We’d be better served as a commonwealth by pulling the plug on this and driving those resources back into programs for seniors.”

But Brassell said even if a contract is not executed with Camelot, “the payments to consultants would be justified by the insight the commonwealth gained through the process.”

She said all three of the firms that had expressed interest in the management contract proposed Keno as an opportunity to boost lottery sales and maximize profits.

“That industry unanimity and expertise is what ultimately led the administration to decide to pursue Keno,” Brassell said. “Once it's determined how best to approach Keno, that aspect alone stands to contribute about $200 million to lottery profits annually, once fully implemented.”

She said a number of other lessons have been learned from marketing and product mix to expanding the player base from the money spent on this pursuit that will benefit the lottery whether it moves forward under public or private management.

House Republican spokesman Steve Miskin said the administration’s ultimate goal was to grow lottery profits to support services for an increasing senior population.

“If you keep the status quo as Democrats are advocating, money is going to run out very soon,” Miskin said.

To date, neither legal consultant DLA Piper of Baltimore, Md., nor financial consultant Greenhill & Co. of Chicago have been paid, Brassell said.

But their meters are running.

For work performed through mid-March, she said DLA Piper’s costs are in the neighborhood of $2 million. And the firm continues to advise the commonwealth through the contract revision, Brassell said.

“We won’t know exactly what will be paid to them until their work on the project is complete,” she said. “We can’t say at this point exactly how much they are owed or will be paid.”

As for Greenhill, its contract was built around payments tied to the project achieving certain milestones. At this point, Brassell said it is owed $850,000.

But if a contract were to be executed with Camelot, Greenhill – a firm where former Gov. Ed Rendell serves as a senior adviser – stands to receive a success fee that will be in the millions.

Administration officials have said all consulting fees would be no more than $30 million if a privatization contract is executed.

Not included in the $2.85 million tab are the additional legal fees being paid to the Philadelphia law firm Blank Rome. That is the firm the administration hired to defend it in a pending lawsuit filed by the American Federation of State, County and Municipal Employees Council 13, some Democratic lawmakers and senior citizens over the lottery privatization.

That firm’s contract is for $200,000 and to date, it has been paid $116,504 out of the lottery fund, Brassell said.

That amount is enough to cover 5,628 prescriptions through the PACE/PACENET program, 46,415 free transit rides for seniors, 247 property tax and rent rebates, or nearly a full year of nursing home care for two individuals.

The Pennsylvania Area Agencies on Aging was among the senior citizen organizations that supported the privatization pursuit as a way to boost lottery profits.

But Crystal Lowe, executive director of the Pennsylvania Association of the Area Agencies on Aging, said the $3 million spent on consultants would go a long way to whittling down the 6,200 to 6,400 seniors on a waiting list for Area Agency on Aging services.

Still, Lowe doesn’t fault the administration for hiring outside experts to help it work through the complicated privatization effort.

“I understand the need to get financial and legal expertise in order to do this,” she said. “The lottery is far too precious for it to be at risk. So many people depend on it and we don’t want to do anything that in the long-term compromises that.”