Leader Blues

Tuesday, August 04, 2009

EDITORIAL >> Lottery looks like a lemon

The Arkansas Academic Challenge Scholarship Advisory Council assembled this week to begin a report on how the proceeds from the Arkansas lottery should be distributed starting in the fall of next year. It will all be spent on scholarships to supplement some $48 million a year that the state spends on college assistance from your taxes, but exactly how will those be determined?

What will be the standards for granting scholarships since the state will have considerably more money than the roughly $100 million that is available for the school year that begins this month? The citizens task force will make only recommendations, which the state higher- education coordinating board can adopt or ignore, and the legislature will fix the size of the individual grants, probably next summer, when more is known about how much the lottery will produce. By then, we will have six or eight months’ experience with Powerball, scratch-off and online gambling.

But the task force’s discussion was notable for the prevalence of common sense and facts, of which there has been precious little in the three months since the state officials appointed the Lottery Commission and it began organizing for the onset of the numbers games this fall. The commission hired the director of the South Carolina lottery, the wonderful prototype that

Arkansas lottery advocates want to follow, to run the Arkansas operation at a salary of $324,000 a year plus emoluments.

Others came on board at six-figure salaries far above the norm for government work.

Ernie Passailaigue, the director, and Ray Thornton, the lottery commission chairman, said the salaries were justified to get world-class experts to Little Rock to start lottery sales quickly. Every day that the state is not selling lottery tickets means hundreds of kids sitting at home who would like to go to college. If you have to spend a couple million dollars extra to compensate experts for getting the lottery running quickly, the millions a day of extra scholarship money justifies it, they said.

It was malarkey, but no one said so. It was plain enough in the advisory council’s discussions. No scholarship will be awarded from lottery proceeds until August 2010. Former State Rep. Jodie Mahony, the wise old veteran that the Capitol sorely misses (he still advises the legislature), reminded the council that all the money that the lottery raises from its startup this fall through the start of school in 2010 is “one-time money” and should not be used to calculate the number and amount of scholarships for that year because the same aggregate amount would not be available the next year. He suggested using those proceeds to help students nearing graduation.

Lt. Gov. Bill Halter, the father of the Arkansas Lottery, was there to bemoan a slight decline the past year in the college-going rate of Arkansas high school seniors. It is a matter of concern, although Arkansas still ranks better among the states on that score than on most educational indices. Halter has said all along that his primary motivation for putting the lottery before the voters in 2008 was to get far more youngsters to go to college, which he said was the key to the state’s economic advancement.

As we noted last week, it hasn’t had that effect in South Carolina, where unemployment has steadily risen since the lottery began in 2001 so that it now outpaces all the states except Michigan and Oregon.

But at least far more South Carolina kids are going to college as a result of an unusually productive lottery that puts hundreds of millions of dollars into scholarships every year.

Actually, no. In 2000, before the scholarship lottery, 66.3 percent of South Carolina high school graduates went to college. Six years after the lottery began, the rate had fallen to 63.9 percent. Tuition and other college costs skyrocketed during the same period, a market phenomenon that anyone could have predicted.

It is time to recognize that the lottery is not going to send thousands more Arkansas youngsters to college every year who otherwise would have stayed home. It will relieve the burden of college for tens of thousands of families, many of whom need relief very little. The kids of millionaires will now be eligible for the state subsidy. That is not so bad, but does that prospect deserve the hysteria and the rashness surrounding the lottery’s startup?