Sunday column: A surplus fantasy

A midwinter fantasy news story:

NASHVILLE — Gov. Bill Haslam has proposed a special “Spend Our Surplus” lottery, allowing five lucky Tennesseans to each designate how $100 million in state revenue overcollections will be allocated in the coming fiscal year.

“This is part of the new normal, where Tennessee is different and we can believe in better,” said Haslam. “It will bring Tennesseans together, providing a new opportunity for everyone with $5 to have an equal chance at allocating state funds rather than leaving a handful of folks, including me and state legislators, to make decisions.”

Under the plan, all citizens will be able to purchase tickets for $5 each starting Feb. 1, and Rebecca Hargrove, chief executive officer of the Tennessee Education Lottery Inc., will oversee a drawing on April 15 to select five lucky numbers. Each winner will then designate how $100 million of $500 million in available surplus revenue will be spent.

A new non-profit organization, to be called You Decide Powerball LLC, will be established to retain Hargrove and hold the ticket receipts until the “Spend Our Surplus” (SOS) lottery is held. Hargrove estimated that ticket sales could exceed $500 million, noting that special-interest organizations, charitable groups and lobbyists could buy blocs of tickets.

The Tennessee State Employees Association immediately sent out an email to members, urging them to buy tickets and designate an across-the-board bonus to state employees as their choice of surplus spending. The Tennessee Hospitality and Tourism Association announced it would urge member corporations to buy blocs of tickets and designate increased tourism advertising as recipient of the winnings.

“Just think: Studies show every dollar spent on tourism advertising brings $14 in new revenue for state and local governments through taxable tourists’ spending,” the association said in an email. “This could be a bonanza for our state for years to come!”

A similar missive went out to members of the Tennessee Roadbuilders Association.

“Frankly, ladies and gentlemen, we have a better chance of getting money for much-needed infrastructure improvements through this drawing — and those to come in future years — than we have in waiting for the governor to do something about a gas tax increase and the anti-tax Legislature then to approve it,” said a lobbyist for the association in a confidential email obtained by reporters.

Secretary of State Tre Hargett, meanwhile, confirmed he is exploring the idea of setting up a nonprofit organization of his own to raise money to be used for purchase of SOS lottery tickets that, if successful, would spend the $100 million on a new state Library and Archives building.

Haslam said the idea for the SOS lottery originated with his success in using surplus lottery funds to launch Tennessee Promise, which provides free college tuition at community colleges for all Tennessee high school graduates.

“That’s one thing I’ve done that everybody loved. So we thought, hey, if we can take a lottery surplus and use that to increase government spending without a tax increase, why not take a state surplus and a lottery, then use it to increase government spending without a tax increase,” he told reporters.

The governor said that Attorney General Herbert Slatery has opined, at his request, that the SOS lottery will not violate the state’s constitution, which requires that state lottery profits go to educational causes. That’s because the winners will not be receiving money themselves, only the right to designate how state money will be allocated to state-supported causes under a supplemental budget amendment to be filed after the drawing.

State Supreme Court Justice Sharon Lee said she could not comment on potential issues that might come before the court, but did say the Supreme Court very much respects the rights of the executive branch and the legislative branch to make decisions – or avoid decisions – in public policy matters. And she said individual judges and attorneys might choose to buy SOS tickets and designate the winning to payment of indigent defense lawyers, who have seen no increase in their compensation rate for more than 20 years.

Senate Speaker Ron Ramsey and House Speaker Beth Harwell praised the governor’s “innovative thinking” in an unusual joint news release that stopped short of a flat-out endorsement pending further review. In subsequent interviews with the media, both declined to rule out purchase of SOS tickets by their respective political action committees.

Drew Rawlins, executive director of the Tennessee Bureau of Ethics and Campaign Finance, said it appears state law would allow PACs to purchase SOS tickets.

Note: This is an unedited version of a column written for the News-Sentinel. The edited version is HERE.