Iowa Lottery workers are about to receive up to $7,700 each in what their board calls incentive-based pay — and what critics call politically tone-deaf bonuses.
The lottery board voted 5-0 Thursday to split $385,710 among the agency's 116 employees, with each person receiving almost 6 percent of annual salary.
The money is to be paid under a long-standing policy that rewards workers when the agency meets financial targets, lottery officials said. In this case, the lottery went almost $3 million over its $51.1 million goal for contributions to the state treasury in the budget year that ended June 30.
The issue of extra pay for public employees has been a hot topic, sparked by revelations last spring that executives of a publicly financed job-training agency received hundreds of thousands of dollars in bonuses.
Lottery Board Chairman Timothy Clausen denied that his agency was paying bonuses, which he defined as arbitrary extra payments made after an employee does something. He said his agency's payments are part of an established plan to reward hard-working employees for results. "It's a group incentive," he said.
Senate Republican Leader Mary Lundby laughed when she heard about Clausen's description. "Isn't that convenient?" she said today. "I love it. That's probably what Ramona would have called it, too."
The Marion senator was referring to Ramona Cunningham, who resigned amid outcry over the nearly $800,000 in bonuses and salary she received over three years as chief executive officer of the Central Iowa Employment and Training Consortium.
Lundby said the lottery payments are bonuses, but she agreed with Clausen that the lottery probably is legally bound to pay them as promised. In the future, she said, state bonuses should be curtailed.
Sen. Thomas Courtney, a Burlington Democrat, agreed that bonuses should be ended. But he said the lottery payments were different than those provided "on a whim" at CIETC. The lottery "did it in bright sunlight," he said.
Courtney, co-chairman of the Legislative Oversight Committee, said he'd heard supporters contend that incentives are needed to encourage state workers to perform better. "I don't believe it for a minute," he said.
Clausen, the lottery board chairman, said the lottery's plan was common in marketing organizations. "We want to run this as a business — not a state agency," he said.
Clausen said the lottery has offered incentives to employees since 1986, though they haven't been paid when goals have been unfulfilled. He said his agency has regularly told legislators about it. When the latest version was proposed in 2004, he said, it was presented to the Legislative Oversight Committee.
Committee member Clel Baudler, a Republican representative from Greenfield, said he doesn't remember seeing the plan. But he said all state-worker bonuses ought to be ended.
Baudler was unimpressed with lottery leaders' explanations that the promise of extra pay sparks sales. Baudler, a retired state trooper, wondered if the same rationale could be used for the State Patrol to offer extra pay if speeding tickets topped a certain level. "If they write way more tickets, should they get 10 percent bonuses? Is that how we want to run state government? I don't think so."
Lottery Board member Mary Junge, a Cedar Rapids lawyer, disputed Baudler's analogy. "I see that as a very different situation," she said. Unlike the State Patrol, she said, the lottery's main mission is to increase state revenue.
Junge said she has never heard a complaint about the policy during her eight years on the board.
The lottery's payments are not based on profits from TouchPlay machines, controversial devices that looked like slot machines and were set up in convenience stores, grocery stores and other businesses. After a public outcry, the Legislature ordered them removed last spring.
Gov. Tom Vilsack sent a letter to the lottery board last month, urging them not to base staff pay on profits from the machines. The board concurred, and based the employee payments on profits from other lottery sales. Such sales set a record, mainly because of strong performance of Powerball.
The only employee who won't receive an extra payment is Director Ed Stanek, who is not covered by the plan. He made $217,352 last year.