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Bloomington Herald-Times

University funding, lottery privatization discussedin Statehouse committee; IU president says more funds for higher education will help state economy
by Steve Hinnefeld
January 26, 2007

INDIANAPOLIS — Indiana University President Adam Herbert appealed for increased state funding Thursday, telling lawmakers IU needs more money to train the state's work force and boost its economy.

Members of the budget-writing House Ways and Means Committee didn't quarrel with that idea, but some questioned Herbert about his support for privatizing the state lottery to help higher education.

Herbert said he's not wedded to the lottery idea, floated last month by Gov. Mitch Daniels as a way to pay for hiring more faculty and stemming the "brain drain" of students.

"Whether or not you use the lottery or some other approach," he said, "the key is to address these issues."

University presidents stood with Daniels when he unveiled his plan to franchise the lottery. The Republican governor said it would produce $1 billion for merit scholarships and to help universities hire top research faculty.

Rep. Peggy Welch, D-Bloomington, brought up the lottery issue Thursday. She said she fears a private lottery operator would want to add games to make the lottery more profitable.

And House Speaker Pat Bauer, D-South Bend, is an outspoken foe of the idea, included in legislation that's been filed in the Republican-controlled Senate.

As with Daniels' 75-year lease of the Indiana Toll Road, it's a bad deal for Hoosiers, Bauer said. He said the state would fare better by operating the lottery itself, not letting a business use it for profit. If there's a need for $1 billion for universities, he said, the state could issue bonds for that amount, then pay them off with lottery revenue.

He said any business that takes over the lottery will want to expand gambling or increase the number of losers to make money.

"It's a bill that creates losers," Bauer said of the Senate bill. "I think it's a shame that any educator would support that."

It's not just Democratic legislators who have questioned the plan.

At a University Faculty Council meeting Tuesday, Jim Baldwin, a librarian at IU-Purdue University at Indianapolis, said the lottery is a regressive tool that hurts the poor. Daniels' Hoosier Hope Scholarships, awarded on the basis of SAT and ACT scores, will likely go largely to upper-income students, he said.

"I can't get over the irony," Baldwin said. "The poor are being taxed to support the well off."

Apart from the lottery idea, IU is asking the state for almost $1 billion in operating funds for the two-year budget period that starts July 1. The centerpiece of its proposal is a request for $80 million for life-science research. Herbert said Daniels' lottery-funded World Class Scholars program would complement the life-science initiative, which also would focus on hiring researchers.

Ways and Means members sounded sympathetic to IU's budget proposal, but some took Herbert to task for repeating the myth that Indiana's lottery was created in the 1980s to fund education. Not so, said Rep. Sheila Klinker, D-Lafayette, a 25-year House veteran.

"It was for capital improvements," she said. "We were very careful not to have education be dependent on the lottery."