State officials are asking for a 14 percent increase in
funding --- a $61 million bump --- for the HOPE scholarship program, which could
lead to dipping into financial reserves next year.
Key legislators say the sizable funding request may make it easier to
convince the General Assembly, which convenes in January, that something needs
to be done quickly to keep the popular lottery-funded program from running out
of money in the next few years.
"It makes it a more immediate issue," said Sen. Bill Hamrick
(R-Douglasville), chairman of the Senate Higher Education Committee and
co-chairman of a state commission that studied HOPE this fall. "The more
information we've gotten to the surface, the clearer it is that something needs
to be done."
Each year, HOPE officials ask for more lottery money to pay for growth in the
program. But the latest request is about $10 million more than in the previous
year.
Past increases have been covered by higher lottery sales. But the growth in
lottery revenues is expected to slow, while HOPE costs continue to soar.
Officials have said if changes aren't made, the HOPE scholarship and the
lottery-funded pre-kindergarten programs may have to begin dipping into
financial reserves in the 2006-07 budget year. And the programs would sink $434
million into debt two years later, according to some state projections.
However, estimates obtained this week from the Student Finance Commission,
which administers HOPE, suggest the fiscal day of reckoning could come as early
as next year.
The commission's budget recommendations call for an increase from $441.3
million in HOPE spending this year to $502.8 million in fiscal 2005, which
begins July 1. The budget is climbing close to matching expected lottery
revenues.
If the pre-k budget remains the same, the two programs would cost about $754
million in the next fiscal year. State officials have been estimating they would
receive about $750 million a year in lottery revenue earmarked for education
during the next few years.
Shelley Nickel, executive director of the Student Finance Commission, said
the estimate for next year's HOPE spending may have to be adjusted upward.
That's because the budget probably does not fully take into account the
increase in college enrollment this fall, she said. The enrollment figures
weren't released until November, after the HOPE budget had been put together.
Enrollment rose 6 percent --- an increase of 14,000 students --- on the heels of
a 7.1 percent jump the previous year.
In addition, the University System of Georgia, which has been hit by budget
cuts the past two years, likely will seek tuition increases that would further
drive up HOPE costs.
Gov. Sonny Perdue and legislators acknowledge there is a problem, but it will
be politically difficult to make substantive changes during the 2004 General
Assembly. Next year is an election year, and HOPE is among the state's most
popular programs.
Currently, students with a B average or higher receive full tuition,
mandatory fees and money for books to attend a Georgia public college. Technical
school students also are eligible for the scholarship, and students at Georgia
private colleges can receive a $3,000 annual grant.
The HOPE study commission that Hamrick co-chairs is expected to review
recommendations to change the program next week at its final meeting. Among the
proposals are eliminating payment for fees and books, kicking poorly performing
college students off the scholarship faster and using a 3.0 GPA standard used by
colleges for a B average to decide whether high school students get a HOPE
scholarship.
Senate President Pro Tem Eric Johnson (R-Savannah) said the size of the
increased funding requested for the program next year should stir action among
lawmakers skittish about dealing with HOPE.
"They can hide their heads in the sand and end up like the city of Atlanta
and their sewer problems," Johnson said. "If you wait, the problem becomes too
big."