Legislature wants lottery to crack down on bonuses

Legislature wants lottery to crack down on bonuses
By JAMES SALZER

The Atlanta Journal-Constitution
Published on: 02/08/08

Lawmakers are moving to increase legislative oversight of the Georgia Lottery Corp. because of anger about the $3 million in employee bonuses the organization handed out last year.

The House Higher Education Committee on Thursday passed a bill giving legislative leaders the authority to appoint two-thirds of the Lottery Corp. board.

Currently, the governor appoints the board, which oversees the corporation and approves its budget.

The legislation, which would require the new board to approve all employee bonuses, also aims to increase General Assembly oversight of the lottery.

The corporation would have to report details of employee bonuses to legislative leaders each year.

Senate leaders are pushing similar legislation.

Sales from lottery tickets pay for HOPE college scholarships and pre-kindergarten programs.

"We want to bring accountability to the spending of the Georgia Lottery Corp. because they have freedom to do things that affect HOPE scholarships," Senate Minority Whip Mitch Seabaugh (R-Sharpsburg) said.

The bills were filed after The Atlanta Journal-Constitution reported on the bonuses, including $236,500 received by Lottery President Margaret DeFrancisco.

The House committee also passed a resolution Thursday urging the lottery to "take a more conservative approach with the distribution of bonuses and incentives."

Lottery officials say the bonuses are necessary to keep employees focused and motivated, and
they say other corporations offer similar incentives.

House Higher Education Chairman Bill Hembree (R-Winston) filed several lottery measures because he was outraged by the size of the bonuses given, he said.

"In the future, the bonuses are going to be looked at closely," Hembree said. "The bonus issue is the most important issue we are trying to address here. This is a message to them."

Legislators often file bills to send messages. The bills might not pass, but the message — in this case, to reduce bonuses — is sent.

However, lawmakers expressed similar outrage in 2004 after the Journal-Constitution wrote about lottery bonuses. Still, the amount paid out last year was greater than in 2004.

DeFrancisco's check of $236,500, combined with her $286,000 salary, allowed her to make about four times what Gov. Sonny Perdue earns. However, Perdue could veto anything that wins legislative approval, because he would be giving up the exclusive power to appoint the lottery board.

Over the years, lawmakers have made frequent changes to the HOPE program.

But they generally have left the Lottery Corp., which raises the money, alone.

Since inception of the games in 1993, lottery ticket sales have increased all but one year, and the corporation has transferred more than $9.7 billion into state education programs.

In addition to the bills passed Thursday, Hembree has filed a measure that would mandate that at least 35 percent of lottery ticket sales go to HOPE and pre-kindergarten, up from 27 percent last year. That could mean tens of millions of dollars more for the school programs.

However, lottery officials say the more they pour into prizes, the more tickets they sell, which increases the overall take for education.

When the last fiscal year ended June 30, the state had $879 million in lottery reserves for HOPE and pre-kindergarten.

House Minority Leader DuBose Porter (D-Dublin) sponsored the bill setting up the lottery corporation in the early 1990s for then-Gov. Zell Miller. He said Miller wanted to make sure politicians stayed out of running the lottery.

"We have one of the most successful, if not the most successful, lotteries in the country," Porter said. "We should not interfere with how it operates when it hasn't been shown that anything is wrong."