Only in Arkansas: The Top 10 Business Stories of 2011

by Arkansas Business Staff  on Monday, Dec. 26, 2011 12:00 am  

Net income through the first nine months of 2011 jumped nearly 30 percent to $62.9 million at First Security, compared with $48.5 million in 2010. The net income leap for the nine-month period at Arvest ($32.9 million to $62.4 million) was even more dramatic: a nearly 90 percent gain.

No. 7
Lottery Leaders Depart

If the Arkansas Scholarship Lottery were a business, its revenue would rank it among the 25 largest private companies in the state. That alone would make the rapid-fire departure of its top three executives big business news in 2011.

But the lottery isn't a private company; it's a governmental agency with a presumed mission to run efficiently in order to maximize the dollars available for college scholarships. And 2011 was the year that inefficiencies, incompetence and blatant abuse outweighed the expertise that the "South Carolina Three" - Ernie Passailaigue, David Barden and Ernestine Middleton - brought to the table.

It was also the year that legislators responsible for creating the distribution formula for lottery-generated scholarships began to consider some unintended consequences: a shift of students from two-year to four-year schools, high attrition due to academic failure and a shortage of dollars for the nontraditional students most likely to succeed.

The South Carolinians had successfully launched Arkansas' first state lottery in record time on Sept. 28, 2009. Twenty-five months later, on Halloween 2011, the total take from lottery ticket sales reached $1 billion. But by then, Passailaigue and Barden had resigned and Middleton had been fired.

Their combined salaries topped three-quarters of a million a year, yet they over-promised and under-delivered on revenue and especially on dollars available for scholarships. The IRS fined the lottery almost $100,000 for being late in remitting taxes owed by big winners, and a state audit found that Passailaigue and Barden each spent at least a quarter of their working days back home in South Carolina.

Since Passailaigue's departure in September, the lottery has been managed on an interim basis by Julie Baldridge, who had been its spokeswoman and lobbyist. The search for a permanent director began in December.

Meanwhile, 40 percent of the traditional freshmen who qualified for lottery scholarships lost them after their first year for failing to maintain minimum academic requirements. And the state Legislature's limit of $12 million in scholarship money for older, non-traditional students meant that nearly 6,000 of the students most likely to succeed were on a waiting list for scholarship assistance. Also of concern: 80 percent of scholarship recipients were opting for four-year schools, creating a glut of students at universities and hurting enrollment at two-year colleges.

No. 8
Football Teams Set Records

Mike Anderson returned to Fayetteville to take over as head coach of the Arkansas basketball team, giving hope of a return to the glory years the program enjoyed under the leadership of his mentor, Nolan Richardson. But the gridiron is where the fun manifested. 2011 was a good year to be an Arkansas college football fan.

University of Arkansas: The Razorbacks (10-2) achieved the team's first back-to-back 10-win seasons since 1988-89, with the only losses coming on the road against the top two teams in the nation, LSU and Alabama.

Along the way, junior quarterback Tyler Wilson threw for 510 yards against Texas A&M to set a new single-game school record.

The Hogs climbed as high as No. 3 in the BCS standings in Bobby Petrino's fourth season as head coach and were rewarded with a top 10 clash with the Kansas State Wildcats at the Cotton Bowl in Arlington, Texas, on Jan. 6.

 

 

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