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During his brief tenure as executive director of the state Lottery Commission, Ernie Passailaigue has been on the defensive. The former head of the South Carolina lottery made headlines when the Arkansas Lottery Commission hired him for $324,000. Passailaigue also took some tough questions from legislators over his decision to hire two vice presidents at $225,000 apiece (likely former co-workers in South Carolina).
As applications pour in for other lottery jobs, attention has turned to premium pay at every level of the organization.
One week ago, the legislative oversight committee approved an initial budget including 88 jobs. A quick comparison indicates better pay grades when compared with comparable jobs elsewhere in state government.
For example, according to the Department of Finance and Administration, an accountant at grade C116 earns a base salary of $32,604 per year. The lottery's accountant, at grade C122, will earn approximately $43,693. A paralegal for the Judicial Disability and Discipline Commission is listed as a grade C117, or $34,324 per year. The lottery's paralegal? $53,109. The staff attorney at the lottery will make $104,080. Attorneys with other agencies, including the managing attorney for the Department of Human Services, earn between $50,000 and $80,000. The chief attorney at DHS brings in $96,228. Similar pay gaps can be found in other positions, such as human resource manager, network engineer, payroll specialist, and procurement specialist.
According to Passailaigue, some lottery jobs will pay more than comparable state jobs, some less. The difference, he says, is in the hours his staff will work and the skill required to do the job.
“I'm not sure you're comparing apples to apples on any one of these positions,” Passailaigue says. “I don't know what people at other agencies make, but they probably had the 4th of July off. And they'll probably get Labor Day off. I think they'll get Thanksgiving off too. I'm trying to get to a point where we're going to have Christmas day off. Not everybody's willing to do that. I've had people come in and say, ‘I've got a vacation planned' or ‘I've got this and that planned,' but it doesn't work that way.”
Passailaigue said, “It's not going to be that way forever,” but did not suggest there would be any pay reductions once the lottery is passed its startup period.
The lottery commission is “not like any other state agency,” says Richard Weiss, director of the Department of Finance and Administration. “They're a creature of the legislature, not the executive branch.” So by statute, the lottery does not have to follow the same hiring procedures as other agencies. Typically, an application for a state job is looked at by the Office of Personnel Management, which decides what pay grade that candidate falls into, before moving on to an independent committee.
“It's different with the lottery,” says Bill Stovall, director of House constituency services and former speaker of the House.
“The legislature gave broad latitude for the lottery commission to act like a business. ... [The formal procedure] would be more transparent, but it would also be much slower,” Stovall says.
Time is invaluable to Passailaigue. He says with every passing day, the state loses $1 million in gross sales (approximately $250,000 in actual scholarship funds) and highly qualified employees are critical to getting the lottery up and going quickly.
“We're trying to set lottery history by starting up a lottery in the quickest amount of time ever,” he says. “When I first came here I read in the paper that they were hoping to get this thing up and running by the first of the year. Let's just say I speed this thing up by 60 days. So is $60 million in sales worth it to compensate 88 people? If this thing flounders then it's a moot point. This enterprise will sink or swim with these 88 people.”
Another possible reason for the pay discrepancies, says Stovall, is that the lottery is a smaller organization than most other agencies.
“If this was a normal state agency, they'd probably have to have about 125 people,” he says. “I think it's a matter of productivity and qualifications. The public mindset toward state government is that there are three people to do two jobs. Now I'm not saying that state agencies don't have people that produce significantly. But one question is how productive are these people compared to the other folks.”
Some have also questioned whether lottery experience in some positions is necessary, especially if it excludes applicants from Arkansas. Passailaigue says that some positions absolutely require it.
“If you hire a trainee as IT gaming director, you've given somebody the combination to the vault,” Passailaigue says. “All of the sudden I get a call one day saying we're paying out millions in prizes that shouldn't be paid out. I know the positions you have to hire with lottery experience, but basically, 90 percent of these people are going to be Arkansans.”
Weiss says pay disparities exist across all levels of state government.
“We've got the same issue with colleges and universities. There's a totally different pay scale for people who work at publicly funded universities and their state government counterparts,” he says.
Passailaigue has been through this debate before.
“This came up in South Carolina,” he says. “We got the same criticism from the governor. The governor said the people in Department of Mental Health got less than lottery staff. We did a compensation study. They found that wasn't the case.”
“We have to attract people in the business sector with maybe a little bit higher skill set and have the ability to pay them. Do I want to just go around and hand out big-paying jobs left and right? No. But I want the people of the state to know, I'm all in.”
At press time, four people have been hired by the lottery: Julie Baldridge, a former aide to lottery commission chairman Ray Thornton, as public relations, legislative and commission liaison director; Bishop Woosley, assistant to the Arkansas attorney general, as procurement director; and Bridgette Frazier, general counsel for the House of Representatives, as staff attorney. They will all be paid $105,000. Ernestine Middleton, formerly of South Carolina, will be paid $225,000 as vice president of administration.
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