AUGUSTA – Each time a customer buys a $1 lottery ticket, store owners earn eight cents from the state. But in the face of Maine’s $190 million projected budget shortfall, that soon may change.

Local storeowners opposed a proposed rule change at a public hearing held by the Liquor and Lottery Commission on Wednesday that would reduce the rate the state pays them to sell lottery tickets.

“(Lawmakers) need a quick fix,” said Phil St. Pierre, owner of Victor News in Lewiston. “The easiest and quickest way is to simply cut the commissions that are paid to lottery agents. But I don’t feel like we’re getting a fair shake.”

St. Pierre said he installed a new electronic lottery sign Monday that was paid for by the state. While he appreciates the high-tech sign, St. Pierre said if vendors had the chance, they might have asked the state to reduce spending on advertising rather than cutting the commission rate.

The rule change would send $1.6 million back to the general fund rather than being spread out among the approximately 1,300 lottery vendors statewide.

Dan Gwadosky, Maine’s director of the Bureau of Alcoholic Beverages and Lottery Operations, said that by reducing the commission rate paid to stores that sell lottery tickets, his agency would meet its budget goal.

“For better or worse, Maine pays more than the rest of the country,” Gwadosky said. “We have some stores that are making $50,000 and $75,000 a year just from sales of instant tickets.”

Maine is the only state that pays an 8 percent commission rate. New Hampshire and 21 other states pay 5 percent.

The introduction of $10 and $20 instant tickets in the past five years has been a boon to Maine lottery vendors, Gwadosky said. Vendors earn 80 cents from the state for every $10 ticket sold and $1.60 for every $20 ticket sold, but do as much work as they would to sell a $1 ticket.

“It’s created a kind of surge of revenue for the agents,” he said. “In 2001, we paid out $10.4 million in commission to retail agents. Last year, we paid out $16.7 million to agents. That’s a 59 percent increase. During that time, we actually sold 5.7 million fewer tickets.”

The lottery ticket vendors argue the state is using the possible rule change as a way to tax small businesses.

Mike Berube manages Lisbon Street News in Lewiston. In 2007, that store sold more than $1 million in lottery tickets, making it the highest seller in the state.

“It impacts your company financially,” Berube said. “For us, it’s very big because we sell a lot of tickets.”

Berube said the rule change would be an “easy fix” for the government, instead of “cutting back on unnecessary items.”

The five-member state Liquor and Lottery Commission makes the decision on whether to change the rule. Public comments will be accepted up to 10 days after the hearing that was held Wednesday and the commission is scheduled to meet again in mid-April.

At least one commissioner has sided with the ticket vendors.

“My personal opinion is that this is a tax increase,” said Commissioner Mike Peters of Dixfield. “The commission rate has been the same for 35 years. Why would I want to participate in raising the taxes on little mom-and-pop stores who are just trying to get by?”

2007 Top lottery ticket sales

Androscoggin County

1. Lisbon Street News*, Lewiston – $1,040,343.50

2. Hannaford, Lewiston – $706,324

3. Victor News Company, Lewiston – $667,161

4. Hannaford, Auburn – $511,614.50

5. Danny’s, Lewiston – $480,257

Franklin County

1. The Avon Mall, Avon – $413,743

2. Rick’s Market, Dryden – $392,102

3. Big Apple, Wilton – $364,508.50

4. Ron’s Market, Farmington – $343,193

5. Riverside Kwik Stop, Jay – $275,594.50

Oxford County

1. Hannaford, Oxford – $528,739.50

2. Mini-Apple Store, South Paris – $521,531

3. Dead River Convenience Store, Rumford – $430,028.50

4. Mexico One Stop, Mexico – $420,156.50

5. Irving Mainway, South Paris – $373,835.50

* Tops state in lottery ticket sales

Source: Bureau of Alcoholic Beverages and Lottery Operations