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Arkansas watches as Tenn rethinks lottery scholarships

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If Lt. Gov. Bill Halter's push for a state lottery is successful, Arkansas legislators may want to consider Tennessee's dilemma before writing rules for spending proceeds that would be earmarked exclusively for college scholarships.

Arkansas' eastern neighbor is struggling with what to do with an unintended $460 million surplus from that state's version of a scholarship lottery. Part of the problem is that many scholarship recipients have not been able to maintain grades good enough to keep their awards. Among other things, Tennessee lawmakers are also considering lowering the grade-point requirement.

Halter, who is heading a drive to put a proposed lottery amendment on the November general election ballot, notes Tennessee's lottery is structured differently from his proposal, but he admits the Legislature probably would have to modify any rules and regulations it initially put in place for a lottery.

"While there may be need for modification and improvement of the (scholarship) program as it goes forward, and you certainly want to learn from experience, ... we shouldn't lose sight of the fact that this proposal, if passed by Arkansans, is going to dramatically increase the amount of financial assistance available to Arkansas families," Halter said in a recent interview with the Arkansas News Bureau.

Halter's campaign, the Hope for Arkansas Committee, has received more than $300,000 in pledges and has hired a Michigan firm, Voter Outreach, to help gather the nearly 78,000 signatures needed by July 7 to place the proposal on the November ballot.

Halter said "tens of thousands" of signatures have already been collected, and he said he expects to have the necessary signatures by the July deadline.

The lieutenant governor estimates a state lottery would generate $100 million a year for scholarships. His proposal would leave it to the Legislature to promulgate rules governing the program.

Tennessee voters approved a constitutional amendment in 2002 creating a state lottery to fund education programs — college scholarships, public school building programs, prekindergarten and after-school programs. The Tennessee Legislature developed rules and regulations, and the lottery went into effect in January 2004.

About 78,000 Tennessee college students currently receive $233 million in scholarships under the lottery program. The amount is expected to reach $238 million next academic year. Recipients receive $4,000 to attend a four-year school and $2,000 to attend a two-year school. Some need-based scholarships — an additional $1,500 a year — are available for students from households with an income of $36,000 or less.

Tennessee high school students must have at least a 3.0 grade point or score 21 on the ACT to receive a scholarship. Earlier this year, the Tennessee Higher Education Commission released a report that showed 50 percent of college freshmen receiving a scholarship fail to retain it for their sophomore year because they can't keep the required 2.75 GPA.

The requirement gets tougher after the first year; recipients must maintain a 3.0 GPA as sophomores, juniors and seniors to keep their scholarships.

Nearly 70 percent of the students receiving scholarships in 2004 lost them by the beginning of their fourth year in school, according to the commission report.

Tennessee Gov. Phil Bredesen has proposed dropping the scholarship grade-point requirement to 2.75 for all four years of college. A Tennessee Senate committee last week endorsed a bill that would reduce the grade-point requirement 2.75 for the sophomore year but maintain a 3.0 for juniors and seniors.

The Tennessee Legislature also is debating what to do with the $460 million lottery surplus.

The large sum has accumulated because lottery revenues have outpaced the number of scholarships during the four years program has been in place, said Lee Harrell, a research analyst with that state's Senate Education Committee. This is the first year where college students in all four classes have scholarships, he said.

Some of the reserve also is from money that was designated for students who were unable to retain their scholarships, Harrell said.

While most of the money goes directly to college scholarships for Tennessee residents to attend in-state institutions, the Tennessee constitutional amendment allows for some of the surplus to be used for capital outlay projects for K-12 school facilities, early childhood school programs and after-school programs. Tennessee law requires at least $50 million remain in reserve at all times.

Along with trying to decide how much of the reserves should go to school building programs and pre-school programs, some Tennessee lawmakers have filed bills that would expand the scholarships to "nontraditional" students, including honorably discharged veterans of the wars in Iraq and Afghanistan.

The so-called "Helping Heroes Grant" would take a one-time amount of $25 million from lottery reserves and place it in an endowment.

Jerry Cox, executive director of the Family Council, which opposes an Arkansas lottery, said because Halter's proposal would place all of the lottery proceeds into scholarships, Arkansas could eventually have a reserve as high or higher than Tennessee's.

"Anytime you create a pot of money and then ask the Legislature to deal with it, most of the time they grow the size of government," Cox said.

He also said he was worried about how much of the lottery revenue the state would spend every year just to advertise and encourage people to buy lottery tickets. The Legislature would decide under Halter's proposal.

The measure also does not specify what types of lottery games would be authorized, Cox noted.

"I'm deeply concerned with the Legislature working on the rules and regulations," Cox said.

Proceeds from the proposed Arkansas lottery would be segregated from the state's general revenue budget, Halter said.

He said he has been paying attention to developments in Tennessee, and the matters that state is dealing with are appropriately being handled by the Legislature, as they would be in Arkansas.

"The specific criteria for the scholarships we did not wish to write into the Arkansas Constitution. That's not the right place for it," Halter said.

Ultimately, increasing the number of high school students attending college in Arkansas is most important, the lieutenant governor said.

"The minor alterations that might be necessary for the program on an ongoing basis ... they kind of pale in comparison to the fact that we're really addressing something very significant here," he said. "I don't want a situation where minor changes and modifications in the future get in the way of people understanding that this has the potential to be a dramatic improvement for the state, the state's families and our students."

To illustrate his point, Halter noted the El Dorado Promise, a $50 million scholarship program for El Dorado School District students funded by Murphy Oil Corp.

Sixty-percent of El Dorado high school graduates attended college before the scholarships were announced last year. The first year the scholarships were available, the number of college-going students jumped to 80 percent, Halter said.

"That is an awesome accomplishment," he said.

The Morning News

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9 comments. Last comment 9 years ago by GASMETERGUY.
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Tnplayer805's avatar - G 14_v78828750_Small.JPG
North Dakota
United States
Member #13397
April 5, 2005
1623 Posts
Offline
Posted: April 14, 2008, 10:35 am - IP Logged

This doesn't look good for education in Tennessee at all.  I'm a student (in another state) and could have gotten $4000 to stay in Tennessee; however, my major wasn't offered in Tenn so I couldn't use any of that money. (Something else that needs to be considered.)

Also, I think it's sort of unfair.  I'm majoring in a physical science (atmospheric science to be exact) and I have to take 3 Calculus Courses, 2 Calculus Based Physics Courses, and Statistics.  Those are tough classes for an "Average" student.  I've watched my GPA take hit after hit because of those classes.  What kills me is when I hear a Business Major say they made C's in high school and they have a 3.5-4.0.  It sucks!  A possible solution to this is not only looking at their overall GPA but their Major/Minor GPA instead.  Believe me.  I can help them sort out this surplus issue!

How are you going to win if you don't play?

    spy153's avatar - maren

    United States
    Member #28409
    December 15, 2005
    1198 Posts
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    Posted: April 14, 2008, 12:59 pm - IP Logged

    For the University of Tennessee:Tuition and fees:$5,864 in-state, $17,130 out-of-stateRoom/board:$6,358

    So why the surplus?  The scholarship programs don't give you enough money.  I think they should up the amount given to students meeting their requirements.  Like you said, tnplayer805, some of the tougher classes are hard enough, let alone having to maintain a 3.0 GPA to keep your scholarship.

    voir-vous dans mes reves!Cool

      Avatar
      Northern California
      United States
      Member #19948
      August 9, 2005
      151 Posts
      Offline
      Posted: April 15, 2008, 11:12 am - IP Logged

      As someone who has spent 20 years in and around the industry, this is always an interesting discussion.

       

      Everyone knows that most players lose most of the time. Its just the way lottery games work. The non-jackpot prizes are supposed to help players rationalize continuing to play while they wait for the "big one" (in whatever game they like).

       

      College scholarships are the best "you win even when you lose" argument ever - even better than the lower-tier prizes in my book. People who wouldn't normally play can now rationalize "hey, my kids (grandkids, nieces, nephews, neighbors kids, whoever) can get a lot of help in going to college" - so even if I play and lose, they (or I, or society) still wins.

       

      The downside is that once the colleges figure out that there is a program that guarantees people a chunk of change, they tend to start raising what they charge. Tuition may be tough to raise - its gets a lot of attention, but fees and other charges tend to start going up dramatically. If a state, like Tennessee starts showing a "surplus", they come under tremendous pressure to a:) dummy down the GPA, or b:) increase the amount of $$$ per year, or c:) put some of the $$$ into other things (school construction, pre-K, etc.). If sales flatten out but these other areas continue to increase, the lottery runs the risk of "not succeeding" in accomplishing its mission.

       

      It can be a very tough balancing act.

        JordanT1021's avatar - Lottery-062.jpg
        North Carolina
        United States
        Member #53121
        June 24, 2007
        6500 Posts
        Offline
        Posted: April 15, 2008, 11:19 am - IP Logged

        go ahead and get the lottery! it is about time. revenue from the nc lottery is amazing

          spy153's avatar - maren

          United States
          Member #28409
          December 15, 2005
          1198 Posts
          Offline
          Posted: April 16, 2008, 9:16 am - IP Logged

          go ahead and get the lottery! it is about time. revenue from the nc lottery is amazing

          Yeah, I think the last two sentences speak volumes about kids going to college and what's really holding them back.  The lottery for education's sake is a very good thing.

          voir-vous dans mes reves!Cool

            time*treat's avatar - radar

            United States
            Member #13130
            March 30, 2005
            2171 Posts
            Offline
            Posted: April 20, 2008, 1:59 pm - IP Logged

            If the kids can keep their GPA numbers up, they should get full rides.

            In neo-conned Amerika, bank robs you.
            Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

              psykomo's avatar - animal shark.jpg

              United States
              Member #4877
              May 30, 2004
              5122 Posts
              Offline
              Posted: April 22, 2008, 5:30 pm - IP Logged

              For the University of Tennessee:Tuition and fees:$5,864 in-state, $17,130 out-of-stateRoom/board:$6,358

              So why the surplus?  The scholarship programs don't give you enough money.  I think they should up the amount given to students meeting their requirements.  Like you said, tnplayer805, some of the tougher classes are hard enough, let alone having to maintain a 3.0 GPA to keep your scholarship.

              NOT only do they not PROVIDE enough MONEY<<<<<<<<<<<<<<<<

              THEY are happy to cut UR BUTT>>>>>>>>>>>OFF>>>>>>>>>>>>>

              if you fall below the 3.0<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

              WHY can't they keep YOU-on if you make a 2.5>>>>>>>>>>>>

              just reduce the payout ????????????????????????????????????????

              NO, NO, NO<<<<<<<<GIVE the student the old KISS our ASS you

              DAM DUMMY BUTT of a student STUPID<<<<<<<<<<<<<<<<

              Remember>>>>student stupid's>>>>>>

              US lottery director's GOTTA EAT & ah

              KEEP up our GOOD image & SALARY

              YES>>OH YES>>WE must save de

              LITTLE chrilden>>LUV dem KID's

              LOL

              PSYKOMO

                LOTTOMIKE's avatar - cash money.jpg
                Tennessee
                United States
                Member #7853
                October 15, 2004
                11338 Posts
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                Posted: April 24, 2008, 4:37 am - IP Logged

                The so-called Truth Campaign against the lottery measure was preparing to distribute church sermon outlines to pastors and bulletin tracks against the measure, the group announced at a news conference April 22, 2008. Cox said that the campaign could expand to include television, radio, and newspaper advertising but that the group will start with 10,000 churchgoers already on its mailing lists.[1]

                Cox added, "But it's going to take more than simply the religious, churchgoing community, I believe, to defeat this measure."[1]

                Cox says he believes voters will turn down the amendment at the polls, noting, "I think that this measure could be defeated with a good public awareness campaign."[2]

                Family Council has directed more of its funds towards another initiative, the Unmarried Couple Adoption Ban, which is sponsored by the group.

                The Arkansas Faith and Ethics Council argues that a lottery is a "notoriously unstable and inefficient revenue source." They suggest that a better estimate for revenue from a lottery is about $50 million, about half of the estimate being used by supporters of the amendment.[12]

                Fayetteville Superintendent Bobby New said a lottery would just add to the financial stress on many Arkansas families, trading one problem for another.[7]

                "I think it creates a real drain on our kids who are already poor," New said. "It provides a mechanism for non-disposable income becoming disposable."[7]

                New said he agrees that the state needs to help students pay for college, but he said the lottery proposal could do more harm than good if low-income families spend their paychecks on lottery tickets.[7]

                "I think it's a worthy cause to provide scholarships to our graduating seniors, but I don't think a lottery is the way to fund it," he said. "I think we need to find a creative and less invasive way to fund scholarships."[7]

                  Avatar
                  NASHVILLE, TENN
                  United States
                  Member #33372
                  February 20, 2006
                  1044 Posts
                  Offline
                  Posted: April 28, 2008, 9:14 pm - IP Logged

                  For the University of Tennessee:Tuition and fees:$5,864 in-state, $17,130 out-of-stateRoom/board:$6,358

                  So why the surplus?  The scholarship programs don't give you enough money.  I think they should up the amount given to students meeting their requirements.  Like you said, tnplayer805, some of the tougher classes are hard enough, let alone having to maintain a 3.0 GPA to keep your scholarship.

                  University of Tennessee has already increased their tuition once and are debating doing it again come Fall 2008.  They, too, saw the extra money students were being given and, to keep the cost as high as possible for the student, have and will increase their tuition.  If the state were to increase the amount of the scholarship, the Board of Regents will raise the cost of education to grab that money for themselves, sticking the poor student with the same old obstacle of high tuition.

                  The more things change, the more they stay the same.