The Atlanta Journal-Constitution
Published on: 02/05/04
Georgia's lottery is well on its way to another record year in revenue, raising new questions about whether there is any need to cut HOPE scholarship benefits this fall.
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That means $376 million — $24 million more than in the same period last year— was generated to pay for HOPE and pre-kindergar(logical not)ten, since those programs receive about a third of ticket revenue.
And the hot streak appeared to be continuing. Lottery spokesman J.B. Landroche said sales last month were up $7 million over the previous January despite competition from the new Tennessee lottery.
The higher numbers come as Gov. Sonny Perdue and some legislators are backing a proposal to eliminate book and fee payments to HOPE scholars because of fears that lottery funds won't keep up with increased costs in the growing scholarship program.
House and Senate higher education committees may take up the proposed legislation today.
The fresh lottery figures would seem to bolster the argument of Lt. Gov. Mark Taylor against cutting payments that go toward students' books and college fees. He contends less dramatic measures could solve HOPE's potential money problems.
Taylor said faulty sales estimates that predicted the state would soon be dipping into HOPE's financial reserves led some legislators to call for cuts in the popular program.
"I hope this will cause the governor and Legislature to slow down, to not cut this program this year, not break their promise to these kids in college . . . and not shift $125 million in [books and fees] costs to these kids and their families," the lieutenant governor said.
But Sen. Bill Hamrick (R-Carrollton), chairman of the Senate Higher Education Committee, said the lottery's current winning run doesn't change the fact that something needs to be done to preserve HOPE. With college enrollment growing, costs for the program will eventually outpace lottery revenue, he said.
More growth expected
Overall college enrollment reached a record 247,000 students last fall, a 20 percent increase since 2000. State officials expect enrollment to keep rising over the next decade. More than half of Georgia's high school graduates qualified for HOPE benefits last year.
"I don't think this growth in lottery revenue changes what we're proposing," Hamrick said. "If you don't do something soon, the train wreck is only going to be put off a few miles down the track."
Georgia high school students with a B average or higher may receive full tuition along with mandatory fees and a book allowance to attend a Georgia public college. These HOPE scholarships are funded by the lottery.
A bipartisan HOPE study commission — co-chaired by Hamrick — recommended, among other things, eliminating the money spent on books and fees, which would cut $125 million in spending during the upcoming fiscal year.
Perdue, who supports the cuts, said he isn't swayed by the latest lottery figures.
"On something as important as the HOPE scholarship, we're not going to spend money we don't know we'll have," said Dan McLagan, the governor's communications director. Lottery revenue "could be up this month, down the next month."
Dire predictions
Members of the study commission predicted last year that the HOPE and pre-k programs will begin dipping into financial reserves by the 2006-07 budget year unless changes are made.
Critics of the proposals say the estimates are probably inaccurate because they are based on no change in ticket sales in the future and annual increases in college tuition and fees.
Taylor noted that sales of lottery tickets have increased every year but one since the lottery began in 1993. He has called on the state Board of Regents to freeze college tuition and fees for three years to help ease the pressure on HOPE.
Budget projects less
Perdue's budget for the upcoming year projects $640 million in lottery revenue for HOPE despite the fact that the games returned more than $750 million for the education programs last year and are well ahead of that figure for the current fiscal year. Perdue's budgeted figure fits his HOPE spending plan, which eliminates money for books and fees even though lawmakers haven't voted on the issue.
His budget plan shows $251 million in lottery reserves.
Bills being pushed by Hamrick and Rep. Louise McBee (D-Athens), House Higher Education Committee chairwoman, also would make a 3.0 grade average a requirement for HOPE, a tougher standard than the current numeric equivalent used to determine a qualifying B average.
Also, the Student Finance Commission would check the grades of college students sooner to make sure they are maintaining the required average. That could kick poor-performing students off the scholarship more quickly.
Lt. Gov. Taylor supports both provisions dealing with grades.
$1,000 yearly cost
The proposed legislation to eliminate book and fee payments this fall would cost HOPE scholars at some top Georgia colleges more than $1,000 a year.
Some legislators say strong lottery ticket sales make changing the popular scholarship program difficult in an election year.
"People are going to want to do as little as possible," said Rep. Tom Bordeaux (D-Savannah).
"If we have to make cuts, it'll have to be in books and fees," said House Speaker Pro Tem DuBose Porter (D-Dublin). "But if lottery revenue continues to improve, then the urgency of passing cuts this year is no longer there."
Hamrick and McBee appear to have some hard selling to do in coming weeks if they intend to get their HOPE bills adopted.
"We have to settle in the legislators' minds that what we are proposing needs to be done," Hamrick said.