Leader Blues

Wednesday, February 20, 2008

TOP STORY > >Halter promotes lottery for education

By GARRICK FELDMAN
Leader editor

Lieut. Gov. Bill Halter’s job isn’t all that demanding. He’s required to preside over the Legislature when it meets every two years and the occasional special session, so he’s spending much of his time promoting a lottery amendment that will go before the voters in November if he gets enough signatures for the proposal.

According to the proposed amendment, all proceeds from the lottery would go toward scholarships and grants for Arkansas residents who attend two-year and four-year colleges. Halter thinks the lottery would produce $100 million in revenues a year after prizes and administrative costs. Critics think that figure is too optimistic.

But Halter is convinced that amount could be raised for college students, providing them with opportunities for an education they might otherwise not have. In an interview with The Leader on Friday, Halter said Arkansas ranks 49th in the nation in the number of college graduates.

“How do we move up from 49th?” Halter asked. He’s convinced that a lottery devoted to education is the way to go.

“We need to do something dramatic,” the lieutenant governor said. “We can have a big impact on scholarships. Funding would be exclusively for colleges.

“Five of six states bordering Arkansas have lotteries,” Halter said, explaining the only nearby state that doesn’t have a lottery is Mississippi, which is cash-rich with casino revenues. Halter says many Arkansans cross state lines to buy lottery tickets, and he wants them to spend their money at home instead.

The state AFL-CIO has endorsed Halter’s initiative. Halter is trying to gather 78,000 signatures to get the initiative on the ballot.

Halter, of North Little Rock, is a former Rhodes Scholar and chief operating officer of the Social Security program during the Clinton administration. He also served as an economic adviser in the Clinton White House.

Halter is a business consultant who serves on the board of Threshold Pharmaceuticals, which is trying to develop cancer-fighting drugs. Sheffield Nelson, a former utility executive, is also gathering signatures for a ballot proposal that would raise the severance tax on natural gas producers.

The additional income would go for state highways as well as education. The lieutenant governor said 42 states and the District of Columbia have lotteries. The only states without lotteries are those with casinos — Nevada is another such state besides Mississippi — and those with strong religious feelings against gambling, such as Utah, North Carolina and Alabama and, of course, Arkansas, or Alaska, which is rich in oil income and doesn’t need revenues from a lottery.
Wyoming doesn’t have a lottery either, presumably because it doesn’t have enough people to support a lottery.

Critics accuse lottery proponents of exaggerating the potential income for education. Illinois, for example, has just the type of lottery that Halter is proposing for Arkansas. All lottery profits must go for education, but according to a recent report, even though Illinois sells more than $1.59 billion in lottery tickets a year, education received only $555 million from those ticket sales.

That figure is only about 7.7 percent of what the state contributes to education. Combined with federal, state and local contributions, the lottery represents only about 3 percent of the $18.6 billion Illinois spends on education each year.

A study at St. Mary’s College in Notre Dame, Ind., concluded: “Regardless of when or where the lottery operated, education spending declined once a state put a lottery into effect....This study indicates that states without lotteries actually maintain and increase their education spending more so than states with lotteries.... Hence, citizens should recognize that claims that lotteries will improve education funding are likely to be as misleading as their odds of winning those lotteries are meager.”

Critics point out that lotteries overplay the chances of winning, with most prizes turning out to be only token payments, such as free lottery tickets.

Halter said he doesn’t accept contributions from lottery firms. He believes lotteries are a good way to provide educational opportunities for Arkansas students.

The games are run by a handful of private firms, such as Automatic Wagering, Scientific Games and G-TECH, which pocket hefty administrative fees, anywhere from 2 percent to 7 percent, although some of the money goes to convenience stores that sell the tickets.

“I respect people’s opinion if they don’t like this funding mechanism, but we’re not stopping Arkansans from buying tickets out of state,” Halter said.

He thinks he can keep that money at home and help students further their education. He doesn’t like to call his campaign for a lottery an obsession, but Halter thinks it would raise many Arkansans out of poverty through education.

Critics say those who buy the tickets could end up in poverty as they chase the elusive dream of huge winnings. Gambling problems are one of the side effects of lotteries, which states often fail to address.