FISCAL NOTE TO
ASSEMBLY, No. 1149
STATE OF NEW JERSEY
DATED: May 24, 1996
Assembly Bill No. 1149 of 1996 provides that the commission paid to a State Lottery sales agent shall be no less than six percent of the agent's lottery sales. Current law provides that the Lottery Commission shall have the power and duty to promulgate rules and regulations which may cover the manner and amount of compensation, if any, to be paid licensed sales agents necessary to provide for the adequate availability of tickets to the public. Since the establishment of the State Lottery 24 years ago, licensed lottery sales agents have received a five percent commission.
FISCAL IMPACT:
The Department of Treasury, Office of Management and Budget (OMB), estimates that this bill would cost the State's General Fund $15,834,000 in Fiscal Year (FY) 1995-96, $16,309,000 in FY 1996-97 and $16,798,000 in FY 1997-98. The OMB notes that Lottery agents currently receive approximately $79 million in sales commissions, for an average of about $15,200 per Lottery agent. According to the OMB, the increase in Lottery agent commissions from five percent to six percent of sales would increase total annual commissions to $95 million. The average commission would increase by $3,045 to $18,245 per Lottery agent.
The Office of Legislative Services (OLS) concurs with the estimate by the Office of Management and Budget. The OLS notes, however, that the impact may not begin until FY 1996-97 because less than two months of FY 1995-96 remain.
ASSUMPTIONS:
The OMB assumes that the increase in commissions from five percent to six percent of sales, a 20 percent increase, will increase annual payments by 20 percent. The OMB projects annual sales increases of three percent for FY 1996-97 and FY 1997-98. In addition, the OMB contends that the increased commission will not provide an incentive to agents to increase Lottery sales. The OLS has no information which would contradict that assumption.
This fiscal note has been prepared pursuant to P.L.1980, c.67.