Ballot issues would enrich sponsors

David A. Lieb

Monday, July 24, 2000 | 10:21 a.m.

LITTLE ROCK - Arkansas voters could get a chance this fall to make someone a millionaire.

As many as four citizen-initiated proposals could be on the Nov. 7 ballot in some counties. And in most cases, the people sponsoring the issues stand to benefit financially.

One proposal would write into the constitution an exclusive right for a private company to run casinos in Arkansas.

Another would direct millions of dollars from a tobacco settlement to the health-care interests who crafted the plan.

Proposals in several counties would sell publicly owned hospitals, with a commission going to an attorney who wrote the initiatives.

"People have realized the initiated act is a good way to get something on the ballot that benefits their particular group," said state Sen. Bill Gwatney, D-Jacksonville. "That is disturbing. It's really not what the intent and the spirit was way back when" the initiative process was added to the state constitution in 1920.

As a car dealership owner, Gwatney stands to benefit by yet another proposal that seeks to repeal the state sales tax on used goods. But Gwatney says he opposes it because it runs afoul of the public good.

"That money all goes to education, and if we take that money out from education, what are we going to replace it with?" Gwatney asks.

The sponsor of the used goods proposal - as well as the ones to sell hospitals - is Fort Smith lawyer Oscar Stilley, a frequent filer of initiative petitions.

Stilley hopes to make $1 million each from nine hospital sales. That would easily cover the estimated $300,000 he charged to credit cards to pay for petition-signature gatherers for his various proposals. To guarantee his money, Stilley's hospital proposals allot him the legal work and a 5 percent commission.

"I think this is a very modest amount to take for a job of this magnitude," Stilley said. "We live in a good old capitalistic society, and I don't see a problem with a person trying to make a living."

Others stand to make even more than Stilley.

Partners in the Arkansas Casino Corp. could make millions of dollars annually if voters authorize them to run six casinos. The proposed constitutional amendment specifically bars all others from operating casinos and even bars the Legislature from enacting laws about casino gambling.

The proposal would impose a 15 percent tax on net casino revenues to go to state and local governments for such things as education and a reduction of the sales tax on food. Casino owners would keep the rest of the money.

As precedent, casino supporters point to Amendment 46 to the Arkansas Constitution, which allows pari-mutuel horse racing only in Hot Springs, where Oaklawn Park is located. Voters approved the amendment in 1956.

"Oaklawn's got a monopoly purely for the benefit of (company president) Charles Cella," said Robert Buchholz, a Dallas attorney for the Arkansas Casino Corp. "At least our company has been trying to get its stock traded."

Casino backers say their amendment also serves a public good. It would keep gambling in Arkansas, instead of Mississippi or other bordering states, and it would legalize charitable bingo and a state-run lottery. About half the lottery revenues also would go to education.

Some political observers say the "public good" is simply a selling point for self-enrichment.

"The very idea of a public good seems to be kind of lost," said Daryl Rice, chairman of the political science department at the University of Arkansas at Little Rock and a professor of political theory and philosophy.

"People usually still give lip service ... but there is no such thing as public good, everyone goes for what they can get," Rice said. "I think it's becoming more acceptable to think that way, and I don't find it particularly heartening."

In the case of the tobacco settlement, health-care interests also point to the public good in a ballot proposal that would divide annual payments of about $62 million among anti-smoking efforts, Medicaid expansion, research and public health efforts.

The proposal was crafted by a group of health-care interests called the Coalition for a Healthy Arkansas Today. Among the group's biggest contributors are the University of Arkansas, which stands to reap millions in research money and new buildings, and the Arkansas Hospital Association, whose members would benefit from the Medicaid reimbursements.

State Health Director Fay Boozman says hospitals and public agencies would pass the benefits on to the people they serve. The research money could lead to new vaccines for children, he said. The anti-smoking money could keep children from using cigarettes.

As for the Medicaid money, "the group that is going to benefit are those individuals who we are going to enable to have access now to care," Boozman said.

Rice says there is a legitimate distinction between the tobacco proposal and others, because the money goes largely to public, not private, groups.

For that matter, the self-benefitting initiatives are little different than bills passed by the Legislature that direct money for projects in a district represented by the bill's sponsor, said Mark Killenbeck, a constitutional law professor at the University of Arkansas at Fayetteville. Either way, that is probably not what the nation's founders had in mind, he said.

"It would be nice to think that people would treat the constitution more seriously," Killenbeck said. "But the initiative and referendum process gives you the opportunity to mess around with the constitution."