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Editorial: NM’s bad bet: Lottery CEO hits the salary jackpot

There’s no telling if she’s ever bought a scratcher or played the Powerball, but New Mexico Gov. Michelle Lujan Grisham seems to know a bad bet when she sees one.

A spokesman for the governor calls the deal to give N.M. Lottery CEO David Barden a 26% raise, increasing his base salary to $220,000, “absurd.” (The governor didn’t appoint any of the current raise-giving Lottery Authority board members.) That’s being kind, considering it’s Barden’s third raise since he got here in 2013, ticket sales have been stagnant at best, and the reason voters and lawmakers authorized the lottery in 1995, to fund college scholarships for N.M. high school grads, has shrunk from 100% tuition coverage to around 60% on Barden’s watch.

Lujan Grisham spokesman Tripp Stelnicki adds “I think if people find this salary and increase to be unconscionable, given the primary goal of the program, they have some justification for feeling that way.”

And that’s because when Barden was hired back in 2013 – after first working for the South Carolina lottery, then a controversy-laden stint helping establish Arkansas’ state game program – he was tasked with keeping the scholarship program solvent while facing growing demand, higher tuition and faltering lottery revenues. In 2017, amid the lottery’s worst-ever year-over-year revenue drop, the scholarship tumbled to 60% of tuition – far less than the 100% originally promised two decades earlier. During all of Barden’s tenure, the scholarship program has been on the edge of insolvency, with lawmakers raiding this fund or that each session to try to keep it in the black. Hardly a resounding success worthy of a double-digit raise.

Yes, lottery revenue has remained stagnant not just under Barden’s leadership, but stretching back as far as 2003 (revenue was $133.6 million then and $134.1 million in 2018). And for years Barden has argued the law requiring 30% of the lottery’s gross sales go straight into the scholarship account has kept him from investing more in prizes that in turn draw more players who in turn increase lottery revenues for scholarships. But Barden and his board have ignored the Journal’s suggestion to put their money where their mouths are and vow to step down should this scheme not pan out and deliver more cash to students – casting doubt on how much confidence they have in it working in students’ favor at all.

Meanwhile Barden still took home raises in 2015 and 2017. Fred Nathan of Santa Fe-based think tank Think New Mexico has criticized the latest raise and the $440,000 the lottery will now have to pay Barden should he be fired without cause before next July. Nathan says “every dollar going to excessive compensation for the Lottery CEO is a dollar less for college scholarships for deserving New Mexico students.”

Of course Barden isn’t responsible for New Mexico’s poverty, the trend away from gambling, or the rising costs of higher education. But he was hired and is paid to do a job – keep the scholarship fund going. And while the Lottery likes to claim its operating expenses are just 3%, under the Lottery Act those expenses go far beyond internal salaries and include everything but prizes and scholarships and remain at 16.71% – despite proposals to cut that to 15%.

In a state like New Mexico, the promise of a tuition-free college education was no small thing, and it has helped many New Mexicans attain an education they otherwise couldn’t have afforded. So let’s remember Barden is raking in 26% more on the backs of New Mexico students – students trying to use a now-partial scholarship as a shovel to dig out of systemic and cyclical poverty in a state where half the population is on Medicaid and one in four residents is on food stamps; a state ranked 48th in the nation for childhood poverty where 27% of children live at or below the federal poverty level; a state where too many of the people who buy Barden’s tickets can ill afford to do so.

Try to explain Barden’s 26% raise to them.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.

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