State Starts with Minimal Cuts to Lottery Expenses
According to an article published in today’s Arkansas Democrat-Gazette, the Department of Finance and Administration is starting with minimal cuts to expenses at the Arkansas Lottery.
According to the article, DFA has eliminated 6 staff positions totaling roughly $400,000 in salary costs.
Of course $400,000 sounds like a lot of money, but consider this: The Arkansas Lottery hopes to allocate around $78,000,000 for college scholarships this year; however, ticket sales have continued to struggle, and the Arkansas Lottery is giving less than 19% of its gross revenue to the scholarship fund.
Even if DFA gives all $400,000 to the scholarship fund, that amounts to a 5% increase in scholarship dollars at best.
This year, the Arkansas Lottery plans to spend $6.45 million on salaries and benefits, and roughly $338.5 million total. Reducing salary expenses by $400,000 represents a savings of only 6.2% on staff compensation, and it amounts to a little over 0.1% of the Lottery’s overall expenses.
While we are glad the Arkansas Lottery Commission has been abolished and Lottery operations are merging with the Department of Finance and Administration, the average state lottery allocates 30% – 35% of its gross revenue for things like education or scholarships; Arkansas is allocating less than 19%.
Eliminating costs and redundancies at the Arkansas Lottery may be a step in the right direction, but it’s probably going to take more significant measures to turn the Arkansas Lottery into even an “average” program.