SPRINGDALE : Halter touts lottery to area Democrats
Posted on Wednesday, August 20, 2008
SPRINGDALE — Lt. Gov. Bill Halter’s proposed constitutional amendment for a state lottery does not specify a minimum percentage of revenues that would fund college scholarships, he told a group of Democrats on Tuesday.
Lottery directors in other states have cautioned against mandating a scholarship percentage.
“They’ve found that simply doesn’t work,” Halter told the Senior Democrats of Northwest Arkansas during a luncheon speech and question session in Springdale.
The other states have found that such commitments can drive the prize jackpots down, hurting a state’s competitiveness with lotteries in other states, Halter said, surmising that residents of the state’s northwest corner are familiar with lotteries in neighboring Missouri and Oklahoma.
A lottery foe, Jerry Cox with the Family Council Action Committee in Little Rock, countered later in the day that Arkansas would likely find the competition tough anyway.
“This lottery proposal is not going to build a fence around Arkansas and prevent people from playing elsewhere,” said Cox, executive director and president of the anti-lottery committee and its companion organization, the Family Council.
“People in the border counties will still play the lottery in other states because the prizes are larger there,” he said.
Should it pass in Arkansas, the amendment simply would legalize state lotteries and set up a few general parameters.
But state lawmakers would decide the details on how the system is run and financed — and how the resulting college scholarships would be structured and awarded — after passing enabling legislation, Halter said.
In July, the secretary of state’s office certified Halter’s proposal for the Nov. 4 ballot, validating 91, 149 signatures from registered Arkansas voters. Only 77, 468 had been required.
If voters approve it, Halter told the group Tuesday, the state would kick its lottery off a year to 14 months from now, and award scholarships shortly thereafter.
Halter fielded a number of questions from the Senior Democrats, some of whom flat-out told him they opposed a lottery.
He tried to assure them that Arkansas’ lottery system wouldn’t cause state funding for scholarships to fall off, pointing out precise language in the amendment that the lottery proceeds remaining after payout of prizes and operating expenses would “supplement, not supplant” existing state scholarship money, which he pegged at $ 40 million annually.
Cox called the wording “rather meaningless, and certainly nonbinding on any legislative body” because the amendment doesn’t specify how much the state will spend on higher education.
“If the state only puts $ 1 into higher ed, the lottery still would be supplementing what the state already gives,” Cox said. Besides, he said, a constitutional amendment isn’t meant to magically freeze spending forever.
“So lawmakers, being the shrewd people they are, can look at the budget and say, hey, higher ed has all this money from the state lottery,” he said.
Halter said his team has studied other states’ lottery revenue and, adjusting for factors such as per-capita income, has estimated Arkansas’ lottery would generate $ 100 million annually, bringing the state’s total scholarship funds to $ 140 million.
By his math before the audience Tuesday, the sum total of the lottery and non-lotteryfunded $ 140 million could help 70, 000 students annually if each scholarship amounted to $ 2, 000. The two kinds of funds would be kept separate, he said.
Other states typically allocate gross lottery receipts in three areas: 40 percent to 60 percent on prize money, 5 percent to 7 percent on administrative costs and the remainder on net scholarship proceeds, Halter said.
“The state of Arkansas could go into all kinds of endeavors to generate money for scholarships. It could go into the tobacco business — but that would do more harm than good,” Cox said.
“We’ve never denied that it would raise some amount of money for scholarships — not as much as the lieutenant governor says it would — but at whose harm and whose peril ?”
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