The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Friday, December 30, 1994              TAG: 9412300688
SECTION: LOCAL                    PAGE: B5   EDITION: FINAL 
SOURCE: ASSOCIATED PRESS 
DATELINE: RICHMOND                           LENGTH: Medium:   53 lines

HARD TIMES? LOTTO CHIEF IS IN LINE FOR A 22% RAISE

While Gov. George Allen's budget proposal would give most state employees a 2.25 percent raise next year, the state's lottery director would get 22 percent.

Allen wants the General Assembly to bump Penelope Kyle's salary from $94,676 to a maximum of $113,558 over the next year, with a ceiling of $116,112 in 1995-96. The raise would be retroactive to Dec. 1.

Budget analysts said Kyle's raise apparently would be the most generous in the budget.

Allen spokesman Ken Stroupe said Thursday the administration had promised Kyle a substantial raise because she took a large pay cut when she quit her job as corporate vice president of transportation giant CSX Corp. in August.

Kyle said she could understand if other state workers are put off by her proposed salary.

``I don't guess there's anything I can say . . . to those who have been discomforted,'' she said. ``People are losing their jobs.''

Kyle, who would not give the dollar amount of her salary, bonus and stock package at CSX, said her proposed raise still would ``not even be close'' to what she made in the private sector.

Kyle said her salary is sufficient for now, ``but down the road, if we're talking about three private school payments, I'm in trouble.''

Kyle and her husband, lawyer Charles L. Menges, have three children under age 6.

Democrats, who narrowly control the General Assembly, said the proposed raise would further demoralize the state workforce. They also said it shows Allen's pledge to reduce the cost and size of government doesn't apply to his friends.

Allen's proposed 2.25 percent raise for government employees would go into effect next December. They would be eligible for performance bonuses ranging from 2.25 percent to 4.55 percent.

The budget includes a salary range for most agency directorships. The lottery director's salary, however, like those of state elected officials, is set at a specific amount.

This is because the lottery department, whose profit is the state's third-largest source of revenue behind the sales and income taxes, is an independent agency.

As a result, the governor's statutory flexibility in setting the salaries of agency chiefs recruited from higher paying private-sector jobs does not apply to the lottery. by CNB