Representatives from the private sector speaking on this issue included: Kathleen Brown, Head of West Coast Municipal Finance, Goldman, Sachs & Company; John Ma, Managing Director, Goldman, Sachs & Company; Steve Juarez, Executive Director, J.P. Morgan; Vineet Seth, Vice President, Global Mergers & Acquisitions Division, J.P. Morgan; and Brian Corley, Executive Director, Infrastructure Advisory Group, J.P. Morgan.

Other speakers from State Government included: Fred Klass, Chief Operating Officer, Department of Finance; Joan Borucki, Director, California State Lottery; Paul Rosenstiel, Deputy Treasurer, State Treasurer’s Office.

Chairman Florez led discussions concerning the pros and cons of leasing the Lottery to the private sector to make it more lucrative. Currently the Lottery whose operations are regulated by the state’s Legislature is a billion dollar business, but critics say other state lottery operations bring in much more money than does the California Lottery. This argument is one that this Administration argues would be solved if the California Lottery were privatized.

The hearings which lasted several hours is the first of many that will look closely at the reasons why other state lottery models are more lucrative and whether California will allow its Lottery to be leased. If approved, California would lease out its Lottery to the private sector for 40 years. This is the amount of time that private sector representatives say would be necessary to make the investment profitable to private sector investors.

Joan Borucki, current Lottery Director, testified that there have been 19 directors before her in past 22 years. She noted that she is the first Director of the Lottery to provide a three year business plan to upgrade operations and refresh the Lottery games. It is hoped that this action will reinvigorate interest in playing the California Lottery and bring in more revenue. This refreshing of games and policies would effect the types of payouts and jackpots that are awarded and would hopefully stimulate more interest from the public and generate more players. This would also bring in more revenue for education.

It was recognized by Chairman Florez that such turnover in the leadership of the Lottery has been harmful to its operations. It was also recognized that the State Legislature has the authority to make the changes necessary to adjust the current model that the Lottery operates under to make the operations generate more money--something that the Lottery Director does not have the power to do.

But what about the state employees who work at the Lottery? What would happen to them? Facing layoffs, possible transfer to other state agencies or forced to go with a private company, the existing state employees face an uncertain future. Even more uncertain would be the fate of the excluded employees who supervise the staff and operations of this multi billion dollar self funding revenue generating agency.

As opponents and supporters testified about the fate of the Lottery, only ACSS was there to protect the rights and careers of its members. Sid Ramirez, Lottery Sales Manager, Central Valley District, and Fred Cherniack, Lottery Sales Manager, Sacramento District along with Sherri Golden, ACSS Lobbyist and Mitchell Semer, ACSS Executive Officer were there on behalf of the state’s excluded employees. ACSS was the only excluded employee association at the hearing, and the only voice looking out for the supervisors, managers and confidential employees who work at the California Lottery.

Fred Cherniack and Sid Ramirez, both ACSS members were the only ones who gave testimony who asked “what about ACSS members?” Many of our members were founding employees of the Lottery who took it from an idea on paper and turned it into the success story it is today. They have dedicated themselves and their careers to making this operation uniquely successful. Their specialized skills developed over the lifespan of the California Lottery are in many cases not transferable to other agencies. They are unique in state service, and many of the ACSS members may not wish to leave state service and go into the private sector. What about their retirements? What about their careers? What about them?

“I’m proud to have been with the Lottery since it was created,” said Sid Ramirez. “We turned an idea into a multi-billion dollar business for the state generating 20 billion dollars for education since its creation in 1985. We should not be forgotten as the state rethinks this agency’s fate.” Fred Chernaick was loud and clear as he reviewed the contributions of the excluded employees who have dedicated themselves to making the Lottery the success it is today.

Both men were singled out by Chairman Florez for reminding the hearing panel about state excluded employees. Also giving testimony on behalf of the rank and file state employees was Jim Hard, President of SEIU Local 1000.

It was clear that our members had been overlooked by those who are debating the future of this agency. Special thanks to both Fred Cherniack and Sid Ramiriez, ACSS members who took time from their busy schedules to give testimony and bring focus back to where it belong - on our members. They made an impact and a difference!

ACSS will continue to meet with members of the Legislature and with this Administration to make sure our members' contributions and careers are not forgotten!

Written by Mitchell C. Semer, ACSS Executive Officer