Leader Blues

Friday, July 17, 2009

EDITORIAL >> Lottery madness

You know that the grabby compensation practices at the state lottery are arousing people because Gov. Beebe weighed in this week that he was bothered by the high salaries. Beebe never criticizes anybody or anything — almost never.

But on successive days, the governor said the mammoth salaries handed out to the new director from South Carolina and the first eight or nine hires were eroding public confidence in the lottery and were causing a rift between the lottery organization and the legislators who created it.

It had not occurred to us to worry that legislators might get disillusioned with the lottery. We were worried about the opposite.

Legislators were falling all over themselves praising the lottery commission and its director and defending their work. But sure enough, House Speaker Robbie Wills, the chief sponsor of the lottery law and its most buoyant cheerleader, announced some reservations on his blog yesterday. He still thought the $324,000 plus perks paid to Ernie Passailaigue, the director, was fine but he was disturbed by the $225,000 paid to two other friends of Passailaigue from South Carolina and other six-figure salaries offered to others.

There was evidence that even the Lottery Commission, appointed by the governor and Senate and House leaders, had begun to detect the rising public rage over the salaries. It voted 7 to 2 to have Passailaigue run his hiring decisions by one of its committees if he was going to pay them more than $80,000 a year. No one yet has been hired at anything nearly as low as $80,000. Gov. Beebe said that was a start and he suggested that maybe they could lower the salaries of some of the people already hired. No way, Passailaigue said. He sticks to his commitments, he said.

Speaker Wills and other lawmakers, along with Lt. Gov. Bill Halter, the father of the Arkansas lottery, had insisted all along that this was not going to happen, that the lottery commission could be depended upon to be frugal and prudent in establishing the lottery.

Actually, it was inevitable. The constitutional amendment legalizing a state lottery was written to assure it. The lottery would not be like any other government agency. It would not be restrained by the state’s niggardly fiscal rules, like appropriations and salary allotments. The lottery was to be run like a business, and the money it collected was not to be run through the state treasury where the distribution and spending would be subjected to pre-audits and other accounting procedures. Passailaigue said this week that it was important to run it like a business where you can pay top dollar to get the people you want.

His import was that the lottery was just more important than other government agencies, like the Education, Health and Highway Departments and the big agencies that collect and distribute $6 billion a year in taxes.

It is the nature of state-operated gambling. The culture of easy come, easy go prevails everywhere. Lotteries pay sizable salaries everywhere although there apparently is none among the 43 or so lottery states that is so free with its money as the weeks-old Arkansas lottery.

Passailaigue is paid considerably more than the directors of the giant California, New York and Illinois lotteries. The two vice presidents he imported from South Carolina make more than the lottery directors of most states. And Arkansas is one of the poorest states and its compensation of government workers among the very lowest of the states.

The Lottery Commission and Passailaigue said the huge salaries were needed so that the lottery could be set up hastily and lottery tickets sold by the end of October. Arkansas has not had a lottery in its first 180 years but suddenly every day counts.

Not a single scholarship is to be awarded before the fall of 2010 so the haste makes no sense. The state universities and colleges will open the fall term next month with $100 million in scholarship aid awaiting them, without a single lottery dollar.

Much of it will not be spent before September 2010, when every youngster who qualifies and wants a scholarship will have one available.

The madness is simply shocking. Gov. Beebe’s mild dudgeon is wholly justified. We would be pleased to see a little rage.

Ernie Dumas writes editorials for The Leader.