Special projects shrink lottery proceeds

Nov 11, 2003, 5:00 am (2 comments)

Georgia Lottery

Almost $1.8 billion worth of Georgia lottery proceeds that could have gone for HOPE scholarships has instead been spent on a long list of other projects, including museums, security fences and metal detectors, and renovations of historic buildings.

And millions are still being spent for special scholarship programs that benefit a few private colleges favored by powerful lawmakers.

Now, with HOPE facing a shortfall and a state commission looking for ways to rein in expenses, some officials wonder whether the lottery-funded splurge over the past decade was a good idea.

That wasn't a concern during the early years of the lottery, when money was coming in so fast politicians almost had to invent ways to spend it.

"When the faucet was turned on, we were gurgling over how to spend it all," said Gov. Sonny Perdue, who was a Democratic Senate leader when the flow of funds began in the mid-1990s.

Initially, then-Gov. Zell Miller, the founder of HOPE, was clear about how the money should be spent.

In a newspaper column Miller wrote a few weeks before voters went to the polls to decide the lottery's fate, he said the money would pay for the HOPE scholarship for students from families with incomes below $66,000, pre-kindergarten classes and "computers and science equipment in schools that otherwise could not afford them."

With limits on who could get HOPE and pre-k funds, and lottery revenue exceeding expectations, the technology category caught most of the overflow.

The money also went to museums in Augusta and Warner Robins. It paid to renovate historic buildings in Milledgeville and to build a $50 million state-of-the-art public broadcasting and telecommunications complex in Atlanta for GPTV.

Such spending angers some lawmakers worried about the financial viability of the HOPE scholarship.

"I don't think there is a soul out there who would have voted for the lottery if they thought it was going to go for more government buildings," said Rep. Ben Harbin (R-Martinez), a member of the House Appropriations Committee. "If the HOPE scholarship is in trouble because we built things like GPTV, we should ask for the money back."

And lottery money is still being spent for scholarships that were not part of the original HOPE program, some of them pushed by lawmakers with connections to the private schools that are benefiting.

For instance, a program started in 1997 will spend about $760,000 this year on engineering scholarships at private Mercer University. House Speaker Terry Coleman (D-Eastman), who served as House budget chairman until taking the speaker job in January, was a longtime member of Mercer's medical school board and has been one of the university's political patrons in Atlanta. The school's president, Kirby Godsey, is a major donor to state political candidates.

Another scholarship, started in 1994, provides a free ride to Georgia Military College in Milledgeville for students who are nominated by their local legislators and have at least a 2.5 grade point average and an 800 on the SAT. The program, scheduled to cost about $770,000 this year, is a favorite of legislators, including House Motor Vehicles Committee Chairman Bobby Parham, who represents Milledgeville.

Such add-on scholarship programs have cost about $63 million since the start of the HOPE program and are budgeted for another $13.5 million this year. But even some commission members studying ways to get HOPE expenses under control are skeptical about cutting off the special programs.

"It looks to me like they should be easy to get rid of," said Rep. Mack Crawford (R-Zebulon). "It may be they are sacred cows, they are just off the table."

Officials began shutting off the lottery spigot for non-HOPE and pre-k projects in 2001, but by then, almost a third of the lottery proceeds designated for education had gone to technology, construction and other projects that broadly fit under the state lottery law.

Sen. George Hooks (D-Americus) was the Senate Appropriations Committee chairman when the cash started flowing into state coffers, and he remembers folks beating a path to his Capitol office begging for money.

"Because it came in with such a bang, we had the money and it was a feeding frenzy," Hooks said.

Technology 'symbolic'

During the first few years of the lottery, proceeds paid for the state to put satellite dishes at about 2,000 k-12 schools, colleges and technical schools to beam programming into classrooms. Lottery money also paid for security fences for the dishes and computer equipment.

Within a year of the first appropriation, there were complaints that new computers were being left in their boxes, unused at schools, in part because teachers hadn't been trained to use them.

The satellite dishes were derided as the "governor's lawn ornament" and "the official state flower," and some experts thought they were the wrong technology at a time when not enough quality programming was available.

Office of Planning and Budget officials said the funding stopped for new campuses after the 1999-2000 school year because schools no longer asked for the dishes. Most were using the Internet instead.

"The technology piece was probably not well thought out," said Richard Skinner, who once ran Georgia's online university and is now president of Royal Roads University in Victoria, British Columbia. "I don't think it made a serious dent in education. It was more symbolic than anything else."

But Bailey Mitchell, executive director of technology services in Forsyth County schools, said the dishes helped make some classes, such as foreign languages, available in schools that couldn't afford to hire teachers in those subjects.

Construction boom

The lottery poured more than $900 million into construction projects, although some of the money didn't go to schools.

More than $50 million went for the Georgia Public Broadcasting and Georgia Centers for Advanced Telecommunications Technology buildings near Georgia Tech.

The Georgia Public Broadcasting building, with 227,000 square feet of studios, suites and meeting rooms, was considered one of the most technologically advanced facilities of its kind in the nation when it opened in August 1997. At its entrance is a cavernous, three-story skylight atrium, which can be used for public and private receptions.

"I always thought we overspent on the GPTV building," said Rep. Larry Walker (D-Perry), who was House majority leader during the 1990s and a key figure in developing state budgets. "It's too lavish, too fine. The first time I saw it, I was flabbergasted."

At the same time, Miller received pressure from officials in fast-growing school systems to spend excess lottery money building schools. Although that had not been mentioned much in the campaign to pass the lottery, the law allowed for spending on "capitol outlay," a bureaucratic euphemism for construction and other spending.

So legislators passed a law setting up a new fund to help build schools in fast-growing systems.

But lawmakers from rural, slow-growth counties didn't want to lose out, so they wrote the law to define fast-growing systems as those with any student enrollment growth over the previous three years. In a few cases, districts that saw enrollment decline in one or two of the previous three years became eligible for the money because their count grew by a few students in one year. The law was changed after that fact was reported in the media, but not before millions had been spent.

Local projects cash in

Local projects, pushed by individual legislators or county delegations, got a share of the lottery loot, too.

Fort Discovery, an interactive science museum along the Savannah River, was touted by Augusta civic leaders as an important piece of the city's riverfront revitalization effort. The town's legislative delegation, which included then-House Speaker Pro Tempore Jack Connell and future Senate Majority Leader Charles Walker, was among the best in the state at bringing home money for local projects.

For Fort Discovery, it came from the lottery: $10 million to get the museum up and running -- budgeted in fiscal 1996 -- and $2.5 million in later years. Another $3.8 million was allocated for renovating the old Capitol building and the Governor's Mansion in Milledgeville in fiscal 1996. Four years later, lawmakers approved another $1.8 million to complete the old Capitol renovations on the campus of Georgia Military College, long a favorite of legislative leaders.

"It's a beautiful place and it's history, but now that we're running out of money, we have to look back at it," said Rep. Earl Ehrhart (R-Powder Springs). "We needed to put money away."

About $3.2 million went for Internet portals and infrastructure at the University of Georgia School of Law in fiscal 2001. Then-Gov. Roy Barnes and ex-House Speaker Tom Murphy attended the law school. Another $1.3 million went for an interactive exhibit at the Museum of Aviation in Warner Robins, represented by Larry Walker and Perdue when he was in the Senate.

Some of the money even went for HOPE grants to prison inmates. During his re-election campaign in 1994, Miller found private colleges had given hundreds of the grants to prisoners. Miller, who put a stop to the practice, said the schools were "just making a racket out of it."

Some of those who were around at the start of the lottery argue state officials wouldn't have saved extra money for HOPE and pre-kindergarten even if they hadn't spent it on the GPTV building and other projects.

"I think we were like every other family," said Mike Vollmer, the state's first HOPE director. "If you have additional income, you're not going to save all your additional income."

Miller said saving the money was unrealistic at a time when lawmakers thought they'd struck oil.

"You had the money and these were some worthwhile projects," Miller said. "In the atmosphere that existed then, you couldn't just salt it away."

Atlanta Journal-Constitution

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Littleoldlady's avatarLittleoldlady

I hope that others read how lottery money is mismanaged by greedy public officials.   I am sure if they had put some of it away, the HOPE scholarship program would not be in jeopardy now. They could have invested some of the overflow into conservative funds and the money would have been there for today. When money is coming in, all of the pork barrell political games come to the front.  Money was spent very unwisely and foolishly. I am going watch the Tennessee lottery for such foolishnish.  I am sure there are many out there with their pet projects just waiting to get them funded by lottery money. Georgia officials are not saying what they will do to try to recoup some of this money nor are they saying they have a "Plan B" to fall in place in case the scholarships are bankrupted.  So much for the "American Dream".  As far as private schools are concerned, if their parents are rich enough to put them in private schools, then they should be rich enough to foot the bill.


why do we have to have a hope scholarship and a hope grant for students?

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