09:59 AM PDT on Monday, April 5, 2004

Associated Press

The decision reached by the Oregon Lottery Commission has pleased neither educators nor bar owners.

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The bars, taverns and gambling parlors that operate state-run video poker machines weren't happy to see their compensation drop by about 9 percent under the new rate structure approved by the state Lottery Commission.

But the reduction still leaves the lottery far short of the Legislature's order to produce an extra $80 million for education.

After taking into account the new lower compensation rates, increased lottery sales, administrative savings and other factors, the lottery is on pace to generate about $35 million of that $80 million, said state revenue economist Michael Kennedy.

"Does that mean a teacher is more special than me?" asked Portland saloon owner Connie Hunt complained last week to the Oregon Lottery Commission that she shouldn't have to give up video lottery profits so those dollars could instead go into schools.

"When did we decide that one occupation is more important than another?" she said.

John Marshall of the Oregon School Boards Association said educators are concerned about the lottery coming up short of the funding goal for schools.

"The question is, obviously, will schools be short next year because the lottery isn't producing what it was supposed to? And the short answer is, 'Yeah,"' he said.

However, Marshall said, with more than a year to go in the funding cycle, he is hopeful that other shifts in the school funding picture, such as higher-than-projected property tax collections and an unanticipated strong performance by the Common School Fund investment portfolio, would help make up any shortfall in lottery funding for schools.

Lottery spokesman Chuck Bauman said his agency wants to find ways to meet the Legislature's funding target.

"We can offer new games, attract new customers, and do the best we can to close that gap," he said.