Wednesday, March 18, 2009

EDITORIAL >> Getting ready for a lottery

The godfathers of the state lottery finally filed their bill, some 75 pages, last week and expect to rush it through both houses and to the governor’s desk this week. No need to read it too closely; trust them.

Actually, we have done a quick perusal and find it unexceptionable, even admirable in many particulars. The bill erects safeguards against any form of bribery that we can imagine offhand, although like the rest of state government now, it does not require competitive bidding in any real sense for all the major contracts. The Lottery Commission will give contracts to Scientific Games or any of the other big gaming syndicates on whatever basis it chooses, and the same for the lottery’s lucrative advertising business.

It overhauls the existing major scholarship programs in ways that make them less daunting and more accessible. The Lottery Commission could lower the threshold to a 2.5 gradepoint or a score of 19 on the ACT to qualify for the big needs-based scholarships.

The constitutional amendment that authorized the legislature to establish a lottery specifies that the large sums collected and spent by the lottery cannot be subject to appropriations and all the safeguards of treasury funds, which is dangerous in the extreme, but the bill tries to appropriate the money by the back door. It sets out line-items for salaries for lottery employees, which is what an appropriation does, but it does not establish spending limits for any aspect of the lottery operation, which would clearly violate the amendment. But it would subject the lottery to the annual legislative audit like all the agencies operating under appropriations.

The bill engages in a little subterfuge. It fixes the maximum salary for the executive director of the lottery and its chief auditor at $141,000 a year, which is close to the appropriated salary for the heads of most large state departments. That is the range of pay for the director of the state Department of Finance and Administration, who handles about $8 billion a year. But the bill sneaks in a little proviso that the Lottery Commission could pay the two top officials another $352,500 each if it chose. That comes to $453,500 a year. One lawmaker explained that the lottery was going to be a big business and you needed to get the smartest business executive you could find, which would require a hefty compensation package.

For $453,500, perks and free rein to run a state-sanctioned numbers racket, they should be able to compete for one of the business geniuses who ran AIG, Merrill Lynch, Bear Stearns, or one of the government-sponsored mortgage companies. Several are in the job market.