Kulongoski won't oust officials over lottery plan.

Byline: David Steves The Register-Guard

SALEM - Despite his dissatisfaction with the Oregon Lottery's proposal to give taverns a cut of nearly one-quarter of the state's video gambling take, Gov. Ted Kulongoski said Monday he would not pressure commissioners to come up with an alternative plan that is more to his liking.

Kulongoski acknowledged that the policy-making Oregon Lottery Commission's members serve at his pleasure, which means he has the power to replace them with members who will agree to vote the way he wants them to. But Kulongoski said that would be an abuse of his authority.

"The pleasure of the governor doesn't mean they do it my way or the highway," Kulongoski said.

The five-person commission is scheduled to vote Thursday on a new proposal to compensate the bars, taverns, restaurants, gambling parlors and fraternal organizations that provide space for state-owned video lottery terminals.

The lottery's director last week recommended an average rate of 24.8 percent. He previously had proposed a 15 percent rate for video slots and retaining the current 28.8 percent for video poker. But retailers threatened to refuse the new games.

Kulongoski took credit for prodding the lottery toward the 15 percent rate, and last week said he was not pleased with the director's retreat from that plan.

Although he said he was not planning to threaten commissioners with firing to get them to carry out his wishes for a lower compensation rate, Kulongoski said he had been in discussions with them about possibly reducing the length of the contract from the proposed five years to something shorter, such as two years. That way, the governor said, the lottery could adjust the rate sooner if it turns out that retailers reap a windfall because the rates are too generous.

A lobbyist for the lottery's retailers, Bill Perry of the Oregon Restaurant Association, said his group opposed a shorter contract period because businesses need a longer planning horizon.

A critic who has pushed for lower compensation rates for retailers, Portland political activist Steve Novick, said he was pleased that Kulongoski was asking the lottery to consider a shorter contract length for retailer compensation.

However, Novick said he was "baffled" that Kulongoski was choosing not to use his authority to press for a policy objective that would put more money into education, job creation and other public spending areas.

"I think since they serve at his pleasure, if they cease to please him, then he should do something about it," said Novick, who added that if Kulongoski wanted to get the commission to back his views, he could start by filling the panel's vacant fifth position.

Novick noted that Kulongoski has been willing in the past to exercise his authority over boards and commissions. Last year, he pressured the board of directors at SAIF, the state-owned workers compensation insurer, to keep the interim director for a longer duration; one board member resigned in protest.

In 2003, Kulongoski demanded, and received, the resignations of most members of the state Board of Higher Education because he wanted to reconstitute the panel to carry out his goals for the Oregon University System.