LITTLE ROCK, Ark. — Arkansas' lottery is on track to bring in roughly $5 million less for scholarships than last year, the games' interim director said Tuesday, as lawmakers prepare to consider whether to reduce the amounts of the scholarships next year.
Interim Lottery Director Julie Baldridge told the lottery's legislative oversight committee that the lottery is on track to raise $89 million for college scholarships for the fiscal year that began July 1. That's a drop from the $94.2 million the games raised in the previous fiscal year.
Baldridge said the lower amount of money predicted for scholarship comes despite an increase in sales for the games. The lottery has sold $187 million for the fiscal year, with $37 million of that going toward scholarships. At this point last year, lottery sales totaled $176 million, with $39 million going toward scholarships.
Part of the discrepancy comes from the lottery's contracts with game vendors, which are paid based on gross sales, Baldridge said. The lottery has also paid out more than expected to winners, with 68 percent of the ticket sales going toward prizes, Baldridge said.
Baldridge said she believed the lottery could raise as much as, if not more than, last year's figures but said she was basing the latest projection on what they've seen so far.
"I want you all to make your decisions based on what I can promise you we will do," Baldridge said. "I can promise you $89 million."
The drop in revenue comes as lawmakers prepare for next year's legislative session, where they may adjust the amounts for the lottery-funded scholarships. The lottery, which was approved by voters in 2008 and began operations the following year, pays for $4,500 annual scholarships for four-year schools and $2,250 for two-year schools.
The Legislature could adjust the scholarship amounts during the fiscal session, which begins Feb. 13. Considering a change would require a two-thirds vote in each chamber since it's not a budget matter.
The dip in scholarship revenue is the latest bad news for the lottery. Ernie Passailaigue, the lottery's first director, resigned earlier this year after complaints about his management of the games.
His departure was followed by the resignation of one of his vice presidents and the firing of another. The lottery began accepting applications for a new director earlier this month, and Baldridge has said she won't be a candidate.
Rep. Barry Hyde told Baldridge the lottery needed to come up with a plan and operate more like a business.
"That's what this was intended to be and that's what we need to get back to," Hyde told Baldridge. "If we don't have a business plan, I would appeal to you to make sure we burn some midnight oil and we get one."
Lottery Commission Chairwoman Dianne Lamberth said she believed changes at the lottery would help boost the numbers back above last year's figures.
"It's going to take a little time, but we are going to move the needle and make sure we have more scholarship money," Lamberth told reporters after the meeting.
Members of the panel said they weren't ready yet to call for changes in the scholarship amounts, and a spokesman for Gov. Mike Beebe said the governor wasn't yet making a recommendation on what to do with the scholarships.
The Legislature cut the amount of the scholarships earlier this year from $5,000 for four-year schools and $2,500 for two-year schools. Interim Higher Education Director Shane Broadway said his agency will review Baldridge's latest projections before talking with the oversight panel about potential changes.
Rep. Mark Perry, the committee's co-chairman, said the committee would likely discuss whether to recommend changing the amounts in January. Perry said he didn't believe the Legislature needed to reduce the scholarship awards and said he was hopeful revenue would increase, especially with the price of Powerball tickets set to rise next year.
"It's got to vary a lot to change it," Perry said.