Where Does Arizona’s Lottery Revenue Go?

(Source: Arizona Republic,  July 1, 2016) – The Arizona Lottery celebrates its 35th anniversary Friday.  And while that has meant 35 years of big dreams, winning tickets and some dashed hopes, it has also meant 35 years of increased revenue flowing into the state coffers.

Since  the Arizona Lottery’s launch on July 1, 1981, its sales revenue has totaled $11 billion, with nearly $3.5 billion of that directed back into state funds and programs. While a majority — and growing — portion of that money has gone into the general fund where the governor and Legislature canThis was the first Arizona Lottery ticket. spend it as they choose, about $1.8 billion has been returned to Arizona communities through grants and programs that help people who are homeless, victims of domestic abuse and children in the foster care system.

“Whenever you hear lottery, people always think about jackpots and what they’re going to do with the dollars,” lottery executive director Gregory Edgar said. “But for us, it’s drilling into the numbers and seeing the impact we can have in our community. The investment of $3.5 billion over 35 years is a pretty significant impact.

Changing agendas

  • 1980: Arizona voters approved the creation of the Arizona Lottery by a narrow margin. Ballot literature promised proceeds would “pay for law enforcement, health services, education and other vital programs.” But the original proposition wording required only that at least 30 percent of revenue go into the general fund.
  • 1990: Voters required that $20 million in lottery revenue a year go into heritage funds for Arizona State Parks and the Arizona Game and Fish Department.
  • 1993: Lawmakers required up to $23 million a year in lottery revenue to be put into a fund for local transit projects and up to $7.6 million a year to be divided among counties.
  • 1996: Voters required that $17 million in revenue be spent annually on specific health and social-service programs, including teen-pregnancy prevention, food assistance for infants and mothers, and disease research.
  • 2010: The Legislature borrowed against future lottery revenue, eliminated allocations to the counties and essentially cut in half lottery allocations to both the transportation fund and the heritage funds, sweeping nearly an extra $30 million a year into the general fund.
  • 2015: The Legislature allocated $900,000 a year in lottery revenue to the Internet Crimes Against Children Enforcement Fund, $100,000 to the Victims’ Rights Enforcement Fund and up to $160,000 a year to the tribal college dual enrollment program.

Where the money really goes.

An Arizona Republic analysis of 35 years of Arizona Lottery revenue and disbursements found that about $1.8 billion in lottery revenue has gone to the specific programs voters and lawmakers designated.

Local transportation projects got $782 million; economic development efforts got $201 million; the Game and Fish Department Heritage Fund, which supports outdoor recreation and protects critical wildlife, got $384 million; health and welfare programs like teen-pregnancy prevention and food assistance for children and mothers got $219 million; the Court Appointed Special Advocates program for foster children got $39 million; homeless shelters got $8 million; a state program for problem gamblers got $3.6 million; and a program to help law-enforcement agencies fight internet crimes against children got $2 million.

“The dollars touch every corner of the state,” Edgar said. “My dream as director would be that every time someone puts down that dollar, they’ve got the thought that I’m having some fun playing a game but also having some impact in our community.” As annual lottery revenue has grown over the years, the money allocated to these programs has remained relatively stagnant due to limits the Legislature and voters set.

Transportation programs got less in 2015 than they did in 1982. Counties for years got $7.6 million a year, but since 2011 have gotten nothing. The Game and Fish Department Heritage Fund got $10 million in 2015, compared with the $20 million a year it got during the 1990s and 2000s. Programs for economic development, health and welfare, foster-care advocates, homeless and gambling addiction have remained stagnant for decades.  The real winner in Arizona’s lottery game has been the general fund

Who really controls the money?

The lottery, overseen by a five-member, governor-appointed commission and an executive director, controls the marketing. But it’s the Legislature that has taken control of where the revenue is allocated.

As lottery revenue has grown and disbursements to specific programs have shrunk or remained stagnant, the Legislature has directed more money into the state’s general fund, where it is impossible to track how specific dollars are spent. That revenue might have gone to schools and public-welfare programs as lawmakers promised and the Lottery markets on its website, or it might have gone to private prisons and lawmaker pensions.

The general fund over the past 35 years has received $1.7 billion.  In fiscal 2015, $72 million — 9.7 percent of the lottery’s $750 million in annual revenue — went directly to programs touted to voters. Another $103 million went into the general fund. That compares with 19 percent going to designated programs in both 2005 and 1995.  Before the recession, the general fund received about $30 million a year. Over the past several years, the annual allocation has topped $100 million. This year, that trend is expected to continue.

Our Turn: Lawmakers are Raiding Parks (Again)

PNI 0712 hike wenima.jpg[Source: Arizona Republic,  February 29, 2016] –Wildlife’s political life seems to have come full circle since 1990 when by a 2-to-1 margin Arizona’s voters gave us the Heritage Fund, $20 million from the Lottery to be spent solely for Arizona’s parks and wildlife.

Half of the money was given in public trust to the Arizona State Parks Board, to support and manage Arizona’s park system. This money was taken by the Legislature in 2010 for budget balancing.

SERIES: Arizonans love state parks, lawmakers don’t

The other half of this money was given by the people to the Arizona Game and Fish Commission, again in public trust, to administer on behalf of Arizona’s wildlife. Twenty-four percent of this money was dedicated exclusively for acquisition of habitat for the benefit and conservation of sensitive wildlife species. Over the past 25 years, Game and Fish commissioners battled hard to protect those funds, especially the Acquisition Fund.

All past commissions believed that these funds — they amount to about $2.4 million a year — needed to be protected at all cost. After all, this fund was one of the crown jewels of the Heritage Voter Initiative. In the state parks half, there was $1.8 million available for such wonders as Kartchner Caverns, the San Rafael Ranch and the Sonoita Creek Natural Area. Such purchases are no longer possible following the legislative sweep.

RELATED: Parks experiencing record visitors

The acquisitions of Sipes White Mountain Ranch, White Water Draw, Wenima and other similar properties resulted from careful spending of Game and Fish’s funds. Now, sadly, those funds are in serious jeopardy.

In this legislative session, the commission has proposed Senate Bill 1361, which would deplete the acquisition fund by up to 50 percent to pay for operations and maintenance of the 16 properties it has acquired. Yes, operations and maintenance are important when you buy property, but it takes a good, full public process — not a legislative sweep — to help solve that problem.

In 2014, the commission made a good start by appointing the Heritage Working Group to study and make recommendations for these solutions. This group studied for months. It made recommendations, lengthy ones, which are now either being misrepresented or ignored altogether.

Among other things, the group recommended that 5 percent of the acquisition fund could be moved (with more public input) to the greater part of the Heritage Fund where operations and maintenance are in statute already. That’s 5 percent, not 50 percent, and with more public process.

MORE: Top 10 state and national parks in Arizona

After all, this is not the commission’s money — it is the people’s money. The voters created this fund and directed the commission, as public trustees, to spend it in a specific manner.

Is this concept important anymore? It is now up to the people to speak up and stop this latest – the 40th, we think – raid of the Heritage Fund. If you value the Heritage Fund and its importance to Arizona’s wildlife, please make your voices heard as the bill, now in the Senate, moves through the Legislature.

Bill McLean, Beth Woodin, and Bob Hernbrode are former members of the Arizona Game and Fish Commission. Woodin is the president of the Board of the Arizona Heritage Alliance, and Hernbrode is vice president of the Tucson Audubon Board and a biologist. (Photo: Mare Czinar/Special for The Republic)

Duda: Gov. Ducey Begins Phase-Out of Boards & Commissions

ArizonaStateCapitolExecutiveTower-Jan08-004a[Source: Jeremy Duba, Arizona Capitol Times, February 29, 2016] – An audit aimed at eliminating some of the 200-plus boards and commissions in state government is still underway, but Gov. Doug Ducey isn’t waiting for the full results to get started on his plan.

Ducey’s primary vehicle for paring down the number of boards and commissions in Arizona is HB2600. A strike-everything amendment to that bill would abolish the Arizona State Parks Board, Water Quality Assurance Revolving Fund Advisory Board, Citizens Transportation Oversight Committee, State Wildland-Urban Fire Safety Committee and Advisory Board of the Arizona State Library, Archives and Public Records.

That proposal began with the Arizona State Parks Board, said Gretchen Martinez, Ducey’s legislative affairs director. A 2012 law overhauling the state’s personnel system, which was championed by then-Gov. Jan Brewer, shifted authority for hiring the state parks director from the board to the governor. Since the governor now exercises decision-making authority similar to that of the parks board, Martinez said it make no sense to continue the status quo.

“It created a huge inefficiency in the operation of that agency,” Martinez said. “The parks director … she doesn’t need to be reporting to two different groups of people.”

Another part of Ducey’s legislative agenda, HB2501, addresses issues surrounding a handful of regulatory boards, but in a far different way than that board and commission elimination bill. Rather than consolidate or eliminate boards and commissions, the bill seeks savings and efficiencies by putting them all under one roof and under the administrative authority of the Department of Health Services.

Under HB2501, 17 regulatory boards for health care professions would come under DHS’s purview, starting in fiscal year 2017 with the boards that oversee acupuncturists, dispensing opticians, homeopathic medicine practitioners, occupational therapists and respiratory care professionals. By fiscal year 2020, the Arizona Medical Board, the Arizona State Board of Nursing and the Arizona Regulatory Board of Physician Assistants will have made the move as well.

The bill does not strip any of the regulatory boards of their licensing and regulatory authority, but does shift some power to the DHS director. The director’s approval will be required for any of the boards to enter into new contracts or renew existing ones, and the director will have the power to hire and fire the heads of the regulatory boards.

“There will be no difference in how a licensee is licensed or reprimanded. Those are not reviewable by the director,” Ducey adviser Christina Corieri told the House Health Committee during a hearing for HB2501.

Furthermore, the director must review all rules approved by the boards to ensure they won’t have a “material anticompetitive effect.” If a rule will have such an effect and isn’t necessary to protect public health, the director would be empowered to reject it. That proposed law is intended to bring Arizona into conformance with the U.S. Supreme Court’s 2015 ruling inNorth Carolina Board of Dental Examiners v Federal Trade Commission, in which the high court struck down a rule requiring teeth whitening businesses to be run by licensed dentists, ruling that the regulation was intended to stifle competition.

Martinez said she expects HB2501 to save money on rent, IT services, human resource services and other aspects that the myriad health-related boards can now share. Ducey spokesman Daniel Scarpinato noted that the move could save money on contracts for things like lobbying and public relations.

“It’s a treasure trove of government waste. And I think part of the reason you’re seeing opposition and you’ll see a lot more opposition is because these are a huge money maker for the Capitol industrial complex,” Scarpinato said.

But the savings from the “90-10 boards,” so known because they keep 90 percent of the revenue they generate and send 10 percent back to the general fund, won’t necessarily go to the state. Martinez said the Ducey administration is keen on passing the savings onto the people who pay for professional licensing that the commissions oversee.

Concern about State Parks Board

Advocates of some of the entities that are on the chopping block are not pleased. And much of the pushback revolves around the Arizona State Parks Board.

Sandy Bahr, director of the Sierra Club’s Grand Canyon Chapter, said the parks board is important because it represents a number of interests and geographic regions from across the state. Eliminating the board, she said, would block an avenue by which stakeholders provide valuable input about the parks system.

“I can understand why one state parks director or assistant director would want to get rid of them, because yeah, it’s messy. It is messy and it takes more time to listen to people, to engage with people, to have dialogue and to disagree. And it sounds like there’s been some disagreement,” Bahr said.

Others were uneasy with the concept in general, or at least in doing it with what some critics alleged was a lack of outside input, along with perhaps too broad a mandate in one piece of legislation. Rep. Lela Alston, D-Phoenix, objected to the idea of eliminating a slew of boards in one fell swoop.

“I think we need to very carefully look at the purposes being served and really give adequate notice to the people who are involved,” she said during a committee hearing.

Similarly, Democratic lawmakers had some reservations about HB2501, the health board bill. House Minority Leader Eric Meyer, D-Paradise Valley, questioned whether the bill was even necessary, and said he was wary of putting a new level of oversight over boards and commissions whose directors already answer to the governor. Even some GOP lawmakers, such as Rep. Paul Boyer, R-Phoenix, expressed hesitation over removing the independence of the regulatory boards.

Martinez predicted that as HB2600 works its way through the process, ideas would bubble up about more entities that should end up on the scrap heap. She noted that Alston, who expressed reservations in the House Government and Higher Education Committee, even had a suggestion of her own.

Before Alston voted against HB2600, she said, “I have been struggling with a particular board and commission over the past couple of years, and that would be the State Fair and Exposition Board. And I wonder if you would consider if this bill goes forward a floor amendment that would consider that board as well.”

Need for more oversight

Scarpinato said the elimination of boards and commissions deemed unnecessary will be an ongoing practice for the remainder of the Ducey administration. In October, the Governor’s Office sent several thousand questionnaires to the members of about 220 boards and commissions along with their executive directors, seeking detailed information about the entities’ makeup, functions and operations. The Governor’s Office said one goal of the questionnaires was to provide data that could be used to determine which boards and commissions were unnecessary and could be eliminated.

The questionnaire results have not been particularly encouraging, according to the Ducey administration. Scarpinato said a “big chunk” of the board and commission members who received the survey never responded to it, which he said was telling.

“Frankly, that speaks to the need to have a lot more oversight on these boards and commissions which have operated really in the dark of the night, so to speak, for now many years and are accountable really to no one. I mean, you can’t even get them to respond to a questionnaire,” Scarpinato said. “We really started that because we wanted to know more. And really we can’t even get the basic information in many cases. So there’s a real problem here.”

Arizona Heritage Alliance named 2011 Conservation Organization of the Year by Arizona Game & Fish

The Arizona Game and Fish Commission met on October 14, 2011 to select award recipients for their Annual Commission Awards. The Arizona Heritage Alliance was selected by the Commission to receive the 2011 Conservation Organization of the Year Award for its commitment and efforts in protecting, preserving and enhancing the Arizona Heritage Fund and its objectives.

The award will be presented at the Commission’s Annual Awards Banquet, which will be held on Saturday, January 14, 2012 at the Carefree Resort & Conference Center.