Leader Blues

Wednesday, February 18, 2009

EDITORIAL >> Turf battle over lottery

Whatever you think about the wisdom of a lottery, you know that it is a dangerous business. Any operation that processes $100 million a year or more is fraught with peril, and if it is the public’s money the public wants all the safeguards that can be arranged. That should be doubly true of a public enterprise that once was the province of mobsters and was known as “the numbers game.”

That is where we begin on the question of whether the freshly minted lottery law, the one that voters installed in the Constitution last year, should be amended to require that lottery proceeds like all other public funds be subject to appropriation by the legislature. The amendment ratified by voters specifies that all the money generated by lottery sales will go into accounts outside the state treasury and it is to be spent freely by the people who run the lottery without the fiscal controls that the Constitution has always required of every program and enterprise run by the government.

That is terrible fiscal policy and we are frankly astonished that it was incorporated into the lottery amendment by Lt. Gov. Bill Halter, whose ideas about running the lottery and the scholarship programs that it will support are otherwise superior to what we know of the implementing legislation being devised by legislative leaders.

If exemption from appropriation and fiscal controls would be good for the lottery, as some have argued — notably yesterday’s Arkansas Democrat Gazette editorial page — then why should it not be good for other state programs, say the Highway Department, the Game and Fish Commission, the prisons, or the University of Central Arkansas? The university, in fact, makes a good case for closing that loophole. The university was sneaking bonus payments to the president through unappropriated foundation and cash funds.

The lottery will be sort of like those quasi-private “foundations.” The commissioners or the director or whoever winds up controlling the lottery could use lottery proceeds to pay whatever salaries and perks they wanted and attend the resort conventions of GTech and Scientific Games, the big gaming contractors who will shortly be operating the Arkansas lottery, or take golf outings to Scotland.

Rep. Rick Green has introduced a constitutional amendment that would require lottery proceeds to be appropriated by the General Assembly like all other school funds. Rep. Green doesn’t do much that we like (though he was one of the heroic few Republicans who broke ranks and supported the cigarette tax), but he is right about the appropriations. That is how we have always done things, Green said. It is not simply tradition but elemental good government.

The two objections are that the legislature cannot be trusted to make the maximum allocations from lottery proceeds and that it is too soon after adoption of the lottery amendment to be changing it. The law strangely says that the legislature itself can manage and maintain the lottery funds although it is mystifying how it could do that without the appropriation power.

The Democrat Gazette suspected that legislators would funnel the lottery money into pork projects back in their hometowns. That would be a crime. Every dime of the net proceeds from the lottery beyond administrative costs and prizes must be spent on scholarships. Green’s little amendment wouldn’t change that. They don’t want the elected legislators appropriating lottery proceeds but they are all right with appropriating the income taxes that you pay? Utter nonsense.

As for amending a fresh law, what is wrong with that? Not 100 voters in Arkansas last November knew or at least thought about the appropriation provision. They merely wanted to have a lottery and give what they didn’t win on their scratch tickets to kids so they could go to college. Given the choice and an explanation of what was at stake, we think nearly all of them would not want a lottery run by commissars who were unaccountable and unfettered by the fiscal controls of good government everywhere.