REPEALING SECTION 41-2998.10, ARIZONA REVISED STATUTES; AMENDING TITLE 41, CHAPTER 27, ARTICLE 2, ARIZONA REVISED STATUTES, BY ADDING SECTION 41-2999.14; REPEALING SECTION 41-2999.14, ARIZONA REVISED STATUTES; AMENDING TITLE 41, CHAPTER 27, ARTICLE 2, ARIZONA REVISED STATUTES, BY ADDING SECTION 41-3003.10; PROVIDING FOR REFERENDUM; RELATING TO THE STATE LOTTERY COMMISSION.

By the Legislature

652,479 / 66.8% Yes votes ...... 324,514 / 33.2% No votes

See Also: Measures

Explanation: Current law in Arizona calls for all state agencies including the Arizona State Lottery to have a "sunset clause"-- a termination date-- unless the legislature renews the legislation. The State Lottery will end July 1, 1999 unless it is enacted again. This year the legislature is asking the voters to decide whether or not to keep the lottery until July 1, 2003.

Meaning of Voting Yes/No

A YES vote of this measure means:

A "yes" vote shall have the effect of extending the termination date for the Arizona State Lottery until July 1, 2003.

A NO vote of this measure means:

A "no" vote shall have the effect of keeping the current date of July 1, 1999 as the date for termination of the Arizona State Lottery.

Proposition 304 would amend state law to continue the Arizona State Lottery until July 1, 2003.

All state agencies, including the Arizona State Lottery, have a scheduled termination date that is periodically reviewed by the State Legislature. This year the State Legislature decided to ask the voters to decide whether to extend the termination date of the Arizona State Lottery.

If the voters approve Proposition 304, the Arizona State Lottery will be scheduled to terminate on July 1, 2003. If Proposition 304 is not approved, the Arizona State Lottery is scheduled to terminate on July 1, 1999.

Summary of Arguments FOR Proposition 304:

1. The State Lottery raises money ( about 2% of the state's budget) for a variety of needed state programs including the Healthy Arizona Initiative ( programs for improving health care), the Heritage Fund ( a program to protect wildlife, cultural, and natural, aspects of our heritage), and local transportation programs, that would not be available without it.

2.The lottery is a good voluntary source of state revenue-- by purchase of lottery tickets-- at a time when taxpayer mood does not allow increasing taxes.

Summary of Arguments AGAINST Proposition 304:

1. Lotteries are gambling and governments should not be sponsoring this activity some judge to be immoral. Further, those most negatively affected by gambling are those least able to pay for lottery tickets.

2. The lottery hasn't cut state taxes as promised initially; it merely encourages increased government spending on new programs.

The Healthy Arizona suggests a "Yes" vote on Prop 304. At the same time we urge strong public scrutiny of the misuse of lottery money by the legislature and their disrespect for the publics mandate that lottery funds be prioritized to benefit healthcare ("Healthy Arizona") and the environment ("Heritage Fund.")

The Healthy Arizona Coalition represents over 40 public service and healthcare organizations, coalitions and agencies in Arizona which came together to work for the Healthy Arizona Initiative (then Prop 203), passed by 73% of voters in 1996. A key part of our initiative was the funding, from lottery monies, of six successful healthcare programs (Healthy Families, Health Start, WIC, teenage pregnancy prevention, rural health and research) created by the legislature, but later defunded or underfunded. Lottery money was to have paid first for Heritage Fund projects (previously mandated, also by direct vote of the citizenry), then healthcare.

But the legislature has ignored the will of the people. Instead legislators argued that Powerball money was "not lottery" and endorsed the little rule they had made for themselves legislatively that the first 25 or so million from Powerball was theirs to spend as they decide, leaving no money for projects as the voters have decided.

Two years, and two legislative sessions, after one of the most overwhelming initiative votes in the states history, not one lottery dollar has gone to healthcare. Programs like Health Start have been completely defunded.

A "yes" vote here, coupled with a "yes" vote on Prop 104, will support democracy in Arizona, reaffirming the votes for healthcare access you have previously cast.

(See our comment under Prop 104 for more analysis of what happened with previous initiative votes.)

Steve Nash, Chair	Maryetta Patch, Vice Chair
Healthy Arizona Coalition	Healthy Arizona Coalition
Tucson	Phoenix

Protect Arizonas Natural Heritage

The Grand Canyon Chapter of the Sierra Club strongly supports reauthorization of the Arizona lottery, because it provides $10 million dollars per year to State Parks and $10 million dollars per year to the Game and Fish Department through the Arizona Heritage Fund.

In 1990, Arizona voters passed the Heritage Fund into law by a decisive two-to-one margin. The Heritage Fund was designed to provide funding from lottery proceeds for protection of habitat for Arizonas wildlife; support historic preservation and preservation of archaeological sites; create and improve community and state parks; promote an excellent trail system in Arizona; and provide funding for environmental education.

Since its passage, thousands of school children throughout the state have benefited from "schoolyard grants" and the creation of dozens of community parks. The Heritage Fund provides lottery dollars for many miles of trails, including the Arizona Trail, and acquisition of important habitat for endangered and threatened species. Kartchner Caverns State Park, scheduled to open up some time next year, has received significant funding from the Heritage Fund.

The reason conservationists worked to bring the Heritage Fund to the voters eight years ago was because year after year Arizona Legislators refused to provide adequate funding for State Parks and for the non-game activities at the Arizona Game and Fish Department. Prior to passage of the Heritage Fund our state parks system ranked as one of the worst in the country. Considering the current legislature's hostility to environmental protection, it is doubtful that they would ever provide funding for any of these activities if there were no lottery and therefore no Heritage Fund.

Please support the Heritage Fund by voting YES to continue the Arizona Lottery. Your vote will help maintain meaningful protection for Arizonas natural heritage.

Kathy Roediger	Sharon Galbreath
Chair	Conservation Chair
Sierra Club - Grand Canyon Chapter	Sierra Club - Grand Canyon Chapter
Phoenix	Flagstaff

The Arizona State Lottery provides critical funds for the transportation systems in Arizona cities and towns. $23 million of the proceeds from the lottery are distributed to cities and towns each year for street and road projects, filling potholes, sidewalk and street light construction and for public transit operating expenses. All cities and towns can use 10% of the monies for cultural, educational, historical or similar projects if there is an equal match from non-public funds.

All cities and towns and their citizens benefit from these transportation dollars. By voting "Yes" you will allow these monies to continue to flow to our local communities.

Cities and towns are also eligible recipients for monies from the Heritage Funds for park and recreation projects that benefit local citizens. These projects help our communities become attractive and livable places and improve the quality of life of all residents.

The dollars from your lottery are being used for important and useful purposes. We ask you to continue these projects by voting to continue the lottery.

Chris Bavasi \Mark Schnepf Mayor, Flagstaff \Mayor, Queen Creek President \Vice President The League of Arizona Cities & Towns \The League of Arizona Cities & Towns

Flagstaff

Queen Creek

The Nature Conservancys Arizona Chapter strongly supports the reauthorization of the Arizona lottery because it reinvests $20 million dollars per year in Arizonas most precious resource: its natural and cultural heritage. Through the Arizona Heritage Fund, the $20 million dollar allocation is divided equally between State Parks and the Arizona Game and Fish Department for parks and recreation, natural areas, wildlife habitat, environmental education and preservation of historical and archaeological sites.

In 1990, The Nature Conservancy helped launch the Arizona Heritage Alliance of more than 100 citizens groups to bring the Heritage Fund ballot initiative to Arizona voters. Although the Conservancy rarely engages in public policy issues on this scale, we supported the Heritage Fund because the need to preserve our states wildlife and natural habitat was overwhelming and urgent and no other reliable source of funding existed.

Our state ranks sixth in the nation in the diversity of its plant and animal life, but falls close to the bottom in spending for these resources. When the people of Arizona passed the Heritage Fund into law by a decisive margin, they ensured that Arizonans would not sit by and watch irreplaceable resources vanish.

Arizona is the second fastest growing state in the nation. Today, more than ever, we need the Heritage Fund to preserve our way of life and protect our future. The Arizona Chapter of The Nature Conservancy urges you to reinvest in Arizona by voting "yes" to continue the state lottery.

Leslie N. Corey	Bruce Williams
Vice President and Executive Director	Vice Chairman, Board of Trustees, Arizona Chapter
The Nature Conservancy Arizona Chapter	The Nature Conservancy Arizona Chapter

Phoenix

Phoenix

The Arizona Heritage Fund was created by voter initiative in 1990. The Fund provides $20 million annually, $10 million each to the Arizona State Parks and Arizona Game & Fish Departments, to protect Arizonas natural, cultural, and recreational heritage.

Heritage Fund monies are improving the quality of life for all Arizonans by:

Creation of more than 300 miles of non-motorized trails throughout Arizona;

Development of outdoor education programs and learning facilities, including field experiences for inner-city youth, conversion of schoolyard areas into wildlife habitat with student learning centers, and development of wildlife/environmental curricula;

Protection of Arizonas cultural and historic resources, including the renovation and restoration of San Xavier del Bac Mission, Prescotts Sacred Heart Church, and Phoenixs Orpheum Theatre;

Purchase of natural open space and critical habitat for wildlife including Whitewater Draw, Sipes White Mountain Wildlife Area, and the Sonoita Creek Natural Area;

Development of community parks and outdoor recreation facilities throughout the state, such as public pools, ball fields, and other facilities;

Monitoring, management and protection of wildlife, and reintroduction of endangered black-footed ferrets, Mexican gray wolves, and California condors;

Purchase and development of new state parks, including Kartchner Caverns, and improvement of existing state parks.

Prior to passage of the Arizona Heritage Fund, neither the Game & Fish nor State Parks Departments had funding to undertake these projects, despite repeated requests for appropriations from the Legislature. If the Lottery is discontinued, the Heritage Fund will lose its sole source of revenue. Vote "Yes" to reauthorize the Lottery and ensure the Heritage Fund continues to protect Arizonas unique natural and cultural heritage.

Andy Gordon, President	Bart Patterson, Secretary
Arizona Heritage Alliance	Arizona Heritage Alliance
Tempe	Tempe

Arizona boasts some of the finest state parks in the nation. Much of the funding to acquire prime lands such as those at Oracle and Red Rock has come directly from Heritage Funding. Of their annual allotment, Arizona State Parks uses five percent for local, regional and state trails and thirty-five percent on parks for outdoor recreation and open space. Seventeen percent targets acquisition of natural areas. An additional seventeen percent is spent on local, regional, and state historic preservation projects. Five percent is spent on environmental education.

The Arizona Game and Fish Department uses sixty percent of their Heritage dollars to identify, inventory, acquire, protect, and manage sensitive habitat for Arizonas wildlife. (Of this, at least forty percent acquires sensitive habitat used by endangered, threatened, or candidate species.) Fifteen percent evaluates and protects habitat. Fifteen percent is spent on urban wildlife and urban wildlife habitat programs. Five percent goes to environmental education including grant money available to educators for developing environmental education curriculum and converting schoolyards into native habitats for Arizonas wildlife species.

The Arizona state lottery provides funding for these environmental and outdoor programs. A "Yes" on the Arizona state lottery will continue to help ensure future citizens of Arizona have an opportunity to enjoy the unique and diverse scenery and wildlife of our state for years to come.

Lynn Krigbaum, President	Mike Baker, President-elect
AALE (Arizona Association for Learning in and about the Environment)	AALE (Arizona Association for Learning in and about the

Phoenix

Phoenix

Paid for by Robert O. Schedler and Karen K. Schedler

The Valley Metro transit system in the greater Phoenix area receives more than 16% of its operating funds from the Arizona State Lottery. If lottery funding is discontinued, there is no plan to replace this amount in the transit budget, resulting in a reduction of transit services, and a complete loss of access to public transportation for some riders.

Valley Metro has more than 125,000 boardings a day. Of these trips, 45% are used to go to work, 16% are for school, 17% are for shopping, and the remaining 22% are for medical appointments and other needs. If public transit services are reduced, it will be a great hardship on those who have no other means of transportation. Currently, four out of five riders of public transportation in the metropolitan area do not have a vehicle available to them, either as a driver or a passenger.

Many of the transit patrons are persons with disabilities, seniors, and low-income workers who totally depend on buses and Dial-a-Ride for mobility and freedom. Students of all ages in the Phoenix area use the bus to get to school and after school jobs. The Welfare to Work program would not be successful without the availability of public transportation.

Voters have consistently rejected additional sales tax for public transportation, which forces cities to fund transit services out of their general funds. This leads to competition with necessary services, such as police and fire protection.

The Arizona State Lottery is critical to the mobility of many citizens. Please vote to retain it.

Susan Webb	Phil Pangrazio
Executive Director	Treasurer
Arizona Bridge to Independent Living	Arizona Bridge to Independent Living
Phoenix	Phoenix

The Arizona Lottery Commission was established in 1980 by vote of the people. In 1997-98 the lottery generated more than $7 million for public transit services in the State. If the lottery goes away, there is no plan to replace these funds and transit services will have to be reduced.

Public transit provides an important service to Arizonans. It provides mobility to the one-third of Arizonans who are not licensed drivers. It serves many including the disabled, the elderly, students and job seekers. Transit is part of Arizonas present and future mobility. The Arizona State Lotterys financial support for transit is critical.

This year the State Legislature decided to allow the voters to again decide whether the Arizona Lottery Commission should continue to exist. If the voters do not approve Proposition 303, the Arizona State Lottery will terminate July 1, 1999. Please vote to continue the Arizona State Lottery and vote yes on Proposition 304.

John Anderson	James Shipman
AzTA Executive Committee	AzTA Executive Director
Arizona Transit Association	Arizona Transit Association
Phoenix	Phoenix

Prior to the funding provided by the lottery, hunting and fishing license fees were the primary source of funding for managing all of the States wildlife. These Heritage Fund lottery revenues have allowed the State Game and Fish Department to provide a more complete and well-rounded wildlife management program. The future well being of Arizonas wildlife depends on continued funding of the Game and Fish Heritage Fund.

We ask that you please vote YES on proposition 304.

Herb R. Guenther	Bill Berlat	Michael M. Golightly
Arizona State Game & Fish Commissioner	Arizona State Game & Fish Commissioner	Arizona State Game & Fish Commissioner
Yuma	Tucson	Flagstaff

Dennis D. Manning	Jean Hassell
Arizona State Game & Fish Commissioner	Arizona State Game & Fish Commissionerr
Alpine	Phoenix

In 1990 Arizonas voters overwhelmingly (almost 2-1) created the Arizona Heritage Fund to provide $20 million each year ($10M for Arizona State Parks and $10M for the Game and Fish Department), for the purpose of protecting Arizonas unique natural beauty and wildlife, preserving our history and culture, providing environmental education and enhancing statewide outdoor recreation opportunities. The solo source of this $20 million dollars for the Heritage Fund has been the Arizona Lottery. (The Lottery also pays for the Local Transportation Assistance Fund, the Clean Air Fund, and other worthy programs.)

These Heritage funds have had a significant positive impact on our quality of life, assisting in conservation and wildlife management, purchase and protection of critical wildlife habitat, creation of hiking trails, renovation and restoration of historic and culturally significant properties, development of outdoor education curricula and learning facilities, creation of neighborhood parks and recreation facilities and many other accomplishments. Historically, the Arizona Legislature had refused to fund these programs, despite repeated requests for appropriations. It is clear that Arizona citizens cannot rely on funding from the general fund for these purposes by our Legislature in the future.

Unfortunately, some legislators disagree with the voters and wish to cut off the funding for these important purposes, by letting the Arizona Lottery die. Remember that the funding at issue is not obtained through a tax, but through revenues generated by the voluntary actions of Lottery players. Remember also that Arizonas voters apparently need to send a second message to the Legislature about our priorities.

Vote "yes" to reauthorize the Arizona Lottery.

Carm R. Moehle, Chairman	Craig D. Hegel, Treasurer
Trout Unlimited, Arizona Council	Trout Unlimited, Arizona Council
Phoenix	Phoenix

Pat Leitner, Treasurer	Joyce M. Lebowitz, Secretary
Tucson Audubon Society	Tucson Audubon Society
Tucson	Tucson

Paid for by Arizona Council of Trout Unlimited; Carm R. Moehle, Chairman

If you vote to end the Lottery, youll just force Arizona State government to grow by 10% instead of 11% for one year, for example. The Lottery doesnt cut your taxes, it increases government spending.

Did you know that gambling addiction is one Americas fastest growing mental health problems? Its up 65% since the 1980s with no end in sight. Ending the Lottery wont solve the problem, of course, but itll help slow down the rapid expansion of commercial gambling and gambling addiction in Arizona.

Ending the Lottery will definitely solve one problem the nearly $200 million of government spending for Lottery advertising that tells us that gambling is good and fun. This government advertising invades our homes and lives involuntarily.

The government ads say we can get rich from gambling. What a terribly unrealistic and unhealthy attitude towards gambling the government is trying to teach my two kids and hundreds of thousands of others! Is it any wonder why gambling addiction is such a rapidly growing mental health problem?

Please vote to quit the Lottery. Lets just try not having a lottery for a change and see if we like it.

John L. Wake
Scottsdale

The lottery undermines the work ethic. It is based on the premise of something for nothing, a concept that encourages laziness rather than personal responsibility and hard work.

The lottery hurts those who can least afford it. Recent surveys in homeless shelters show that nearly 20 percent of homeless say gambling, especially lotteries, has played a part in their homelessness.

The lottery is also bad economics. According to some studies, for every $1.00 the state collects from the lottery, it costs the private sector between $2.75 and $4.75.

The lottery is both bad public policy and bad business. Our state is destroying the very people that need help the most.

While some level of gambling as a form of entertainment may be appropriate in our society, the state government should not be in the business of promoting and operating gambling. Please join me in voting no on Proposition 304 and putting an end government sponsored gambling.

John Shadegg, Congressman
Phoenix

Paid for by John Shadegg for Congress

Pastor Leo Godzich
Cave Creek

It is wrong for government to encourage gambling. Yet, the state spends millions of dollars (and estimated $9.4 million last fiscal year) in clever advertising trying to entice more people to gamble. This is necessary because lottery sales have been declining.

Because an estimated five percent of gamblers become addicted to gambling (potentially resulting in suicides, broken families and bankruptcies), the government should not be in the business of getting more people to gamble. It costs society at least as much to deal with problems associated with gambling as it takes in revenues.

Moreover, as governments are trying to discourage other addictive behaviors (e.g., drugs, smoking and alcohol abuse), we send the wrong message when government promotes gambling.

The people who profit from the lottery are mainly the big international gambling companies, advertisers, lottery retailers and the state bureaucracy. Lottery sales have declined from a peak in 1990 and now the states profit accounts for only one half of one percent of total state expenditures. Clearly, we can make up that money.

Whatever you think of gambling, it is not something government should be encouraging or promoting. Lets do the right thing: VOTE NO on Proposition 304.

Jon Kyl

Jeff Groscost

Bob Stump

Phoenix

Mesa

Tolleson

John Shadegg

Matt Salmon

Phoenix

Mesa

Larry Chesley
Gilbert

An independent audit by the State Auditor General includes the following examples of your Arizona Lottery. The Lottery is owed $800,000 by retailers but will not collect. The Lottery spent $30,000 promoting a game and purchased $154,000 of excess inventory and only sold $52,000 of tickets for a loss of over $130,000 on a single game. The Lottery spent seven months and significant money developing a game that was eventually canceled due to planning problems. As a result of poor planning, 51 million excess unsold instant tickets were purchased by the Lottery at a cost of over $1 million in printing costs alone, with additional disposal costs. Employees have unlimited access to cash drawers and vaults, making theft possible and difficult to detect. The Lottery does not adequately protect cash on hand and other state assets. The Lottery staff have distributed game prizes to retailers and others in violation of statutory provisions. The Lottery computer system lacks adequate security. The list of mismanagement and abuse goes on for 42 pages. Enough is enough! Get rid of this abuse now! Vote No on Proposition 304.

Rebecca S. Bradley
Glendale

Bernice C. Roberts
Former Maricopa County Republican Chairwoman
Phoenix

Paid for by Richard Bark

Marilyn Jarrett
Mesa

Paid for by Committee to Re Elect Marilyn Jarrett

If the government should only perform certain functions, we cannot justify having the state not only promote gambling, but actually running the operation and profiting from it.

Gambling is the fastest growing addiction in America. The highest rate of addicion is among children. What begins with lottery tickets often ends up in full-fledged gambling addiction. While we spend millions of dollars to encourage kids not to smoke or chew tobacco, we turn around and spend more money encouraging them to gamble. Having the state promote a social vice that often leads to addiction, bankruptcy, suicide and criminality is a total outrage.

The lottery itself has been plagued by scandal and mismanagement. The promised state money never materialized, except in the pockets of out-of-state companies who pushed the lottery through in the first place.

Meanwhile, our "watchdog" news media sells out objectivity by gleefully announcing the winning numbers on its nightly news broadcasts. Only rarely does the media focus on the real legacy of gambling broken and bankrupt families, kids left in cars while Mom gambles, college students committing suicide over debts, athletes being paid to throw games, crimes committed to feed a gambling addiction.

And what is the state of Arizona doing about these problems? Spending your money to encourage everyone to start gambling! Vote "no" on Proposition 304, and get the government out of the gambling business.

Len Munsil, Esq.	Marion "Mac" Magruder
President	Board of Directors
The Center for Arizona Policy	The Center for Arizona Policy
Scottsdale	Phoenix

Sec. 3. Repeal

Section 41-2999.14, Arizona Revised Statutes, is repealed.

41-2999.14. Arizona state lottery commission; termination July 1, 1999

A. The Arizona State Lottery Commission Terminates On July 1,
1999.

B. Title 5, Chapter 5 Is Repealed On January 1, 2000.

Sec. 4. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3003.10, to read:

41-3003.10. ARIZONA STATE LOTTERY COMMISSION; TERMINATION JULY 1, 2003

A. THE ARIZONA STATE LOTTERY COMMISSION TERMINATES ON JULY 1,
2003.

B. TITLE 5, CHAPTER 5 IS REPEALED ON JANUARY 1, 2004.

Sec. 10. Referendum; state lottery; vote at general election

A. Under the power of the referendum, as vested in the legislature, sections 3 and 4 of this act are enacted, to become valid as law if approved by the voters and on proclamation of the governor.

B. The secretary of state shall submit sections 3 and 4 of this act to the voters at the next general election as provided by article IV, part 1, section 1, Constitution of Arizona.

FINAL VOTE CAST BY THE LEGISLATURE ON HB 2158

House - Ayes, 40

Senate - Ayes, 16

Nays, 10

Nays, 13

Not Voting, 10

Not Voting, 1