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2009 April 6 - 12:00 am

MONEY TREE: Arkansas House, Senate Approve Lottery To Fund College Scholarships

LITTLE ROCK, Ark. (AP) — Legislation to set up a state lottery approved by voters last year and the college scholarships the games will fund won overwhelmingly approval in the House and Senate.

The 35-member Senate unanimously approved the 117-page bill hours after the House backed an identical proposal 99-0. Both proposals are expected to gain final passage and land on the governor’s desk next week.

Backers of the lottery proposal say they want to move quickly on the legislation so the lottery can begin selling tickets later this year. The proposal creates a nine-member commission appointed by the governor and legislative leaders to hire the lottery’s staff and manage the games’ operations.

The games’ net proceeds will be used to overhaul the Academic Challenge Scholarships. The amounts of the lottery-funded scholarships won’t be determined until next year.

“This is a scholarship program that will open the doors to higher education to students who have never had it before,” House Speaker Robbie Wills said.

After the Senate vote, members gave Lt. Gov. Bill Halter a standing ovation.

Halter, who presides over the Senate when it is in session, led the successful campaign that put the lottery measure to a popular vote last November. Voters approved the proposal by a large margin.

Halter, invited to speak to the Senate after the vote, said he was grateful to the people who signed petitions to put the lottery on the November ballot and those who supported it. Halter said he believes the lottery-funded scholarships will help change the results of surveys that routinely show Arkansas as having low incomes and a low proportion of college graduates, compared to other states.

“When we do that, some future (senators) and some future lieutenant governor will never have to say that, for all their lives, their state has been either 48th or 49th in per-capita income,” Halter said.

Halter told lawmakers that the lottery proposal they crafted had his support, even though he said he thinks there are several areas that need improvement. The lieutenant governor indicated that he will continue pushing for changes to the lottery and the scholarships.

“I’ve got the same role I’ve always had. I don’t have a vote and I don’t have a veto, but my office and I have a voice,” Halter said after the vote.

The bill doesn’t spell out how much the scholarship awards will be and instead leaves that decision up to the Legislature when it meets in 2010. The measure offers a range of scholarships awards that it recommends lawmakers use, based on revenue from the lottery.

Wills reassured lawmakers that, if something in the bill doesn’t work out right, they can fix it in the fiscal session next year or in future sessions down the road.

“If there’s a better way to do it, this Legislature and General Assemblies in the future will have every opportunity to tweak this,” he said. “We’ll continue to adjust and adapt to the conditions that are presented to us.”

One of the first changes the bill’s crafters say they’ll pursue is a lower salary cap for the games’ top officials. Sen. Terry Smith, the Senate bill’s sponsor, said a follow up bill will set the maximum pay for the lottery’s executive director at roughly $354,000. The legislation appeared to give the Legislature room to pay the director up to nearly $500,000 annually, but Smith and Wills say that wasn’t their intention.

“We’ll fix it so there won’t be any half-million dollar salary,” Smith said.

Most of the decisions on how to run the lottery, including which games to offer and whether to take part in multi-state games, will be left up to the lottery commission under the proposal. The legislation, however, specifically bans the state from operating video lottery terminals or casinos.

“We have structured the commission to act quickly because this is a multi-million dollar business, but it will have legislative oversight,” Smith said.

The lottery’s net proceeds will be used to expand the existing Academic Challenge scholarship and make it available to students who graduate with a 2.5 grade-point average. Lawmakers will determine the amount of the scholarships next year.

Under the recommended scale, a scholarship to a four-year university would be worth $2,500 and worth $1,250 at a two-year college if the lottery proceeds are more than $49.3 million, but less than $60.4 million. If net proceeds are greater than $126.9 million, the proposal recommends four-year scholarships be $6,000 and two-year scholarships be $3,000. 

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