By John Lyon
Arkansas News Bureau
LITTLE ROCK — The House chairman of an advisory council on lottery-funded college scholarships raised concern Tuesday that rising tuition and six-figure salaries for lottery employees could undercut the ability of Arkansas’ lottery to benefit students.
Speaking at the inaugural meeting of the 16-member Arkansas Academic Challenge Scholarship Advisory Council, state Rep. Mike Burris, D-Malvern, said since the 1991-92 school year, tuition and fees at four-year colleges in Arkansas have increased, on average, 275 percent for Arkansas residents and 243 percent for non-residents.
Tuition and fees at two-year colleges have increased by an average of 227 percent for Arkansas residents and 313 percent for non-residents, Burris said.
“There is a real serious concern within the Legislature that all of these scholarships can be eroded and eaten away with the increased costs,” Burris told the council, most of whose members were chosen by the state Department of Higher Education.
Burris said later he also has concerns about the high salaries going to lottery employees.
“It’s a lot of money,” he said. “There may be a reason — reasons that I don’t know about, that I don’t understand — but I think the salaries are high.”
The Arkansas Lottery Commission hired Ernie Passailaigue, formerly South Carolina’s lottery director, to head Arkansas’ lottery at an annual salary of $324,000, making him the third-highest-paid lottery director in the country.
Passailaigue has hired two South Carolina lottery executives, Ernestine Middleton and David Barden, for vice president positions at salaries of $225,000 each; Grant County Sheriff Lance Huey for the position of security director at a salary of $115,644; and four other Arkansans for various positions at salaries of $105,000 each.
Rep. Buddy Lovell, D-Marked Tree, said Tuesday he is concerned that the salaries will cut into potential lottery proceeds.
“I think when we do something like that, it’s taking scholarships away from kids of Arkansas that deserve them,” he said. “If we would be more realistic in hiring practices, I think we’d have more money to pay scholarships with.”
Passailaigue said Tuesday he has no control over college tuition rates, but rising rates are “a concern all over the country.” He also defended lottery employees’ salaries, saying he has chosen people who have the experience necessary to get the lottery started quickly and train other employees.
Oct. 29 is the target date for lottery ticket sales to begin.
“I could have come out here and just hired 89 pretty good people and cut back on salaries, and possibly took chances on folks, and maybe I made some good hires and maybe I didn’t,” Passailaigue said.
“I could sit around and train 89 people in the lottery business and get this thing up and running instead of October, maybe the end of November,” he continued. “If I lose 30 days on that, that’s $7.5 million (for scholarships) that I’ve lost by trying to cut corners.”
Passailaigue estimated the lottery’s total annual payroll will be between $5.2 million and $5.3 million. He said previously he planned to hire 88 people for an estimated $5.1 million payroll, but he said Tuesday that plans now call for the creation of three district offices instead of two, which will require hiring an additional regional sales manager.
Sen. Shane Broadway, D-Bryant, said it will be up to lawmakers to ensure that tuition hikes don’t negate the benefits of the lottery.
“I think that is something that future General Assemblies are going to have to watch,” he said. “It’s a concern, because it’s happened elsewhere, that tuition rates have escalated as the scholarships have gone up.”
If enrollment increases because of new scholarships, colleges may have a justifiable need to fund expansion projects, “but if they’re just raising tuition rates because students are receiving scholarships … that’s something for the General Assembly to monitor,” Broadway said.
Regarding salaries, Broadway said that if the lottery employees get the lottery started on time and run it well, they will justify their pay.
“If they’re performing, I don’t mind,” said Broadway, who helped write the law passed this year setting salary limits for lottery workers.
