Tue., February 7, 2012 3:39pm (EST)

Think Tank Suggests Lottery Overhaul
By Jeanne Bonner
Updated: 2 years ago

ATLANTA  —  
Last year, Republicans and some Democrats overhauled the HOPE college scholarship (in photo). The Georgia Lottery funds both the scholarship and pre-kindergarten. The Georgia Budget and Policy Institute is recommending the state change how it uses the lottery funds for these two programs.
Last year, Republicans and some Democrats overhauled the HOPE college scholarship (in photo). The Georgia Lottery funds both the scholarship and pre-kindergarten. The Georgia Budget and Policy Institute is recommending the state change how it uses the lottery funds for these two programs.
A new report from a non-partisan think-tank recommends overhauling how the state uses lottery funds to pay for pre-kindergarten and college scholarships. But Gov. Nathan Deal says many of the ideas are non-starters.

Officials with the Georgia Budget and Policy Institute say early education should get 40 percent of the money the lottery gives to the state because it’s a better long-term investment. Right now, pre-k gets a third of the pot.

The rest of allocated lottery funds go toward HOPE college scholarships. But GBPI experts suggest creating a $100,000 family income cap for scholarship winners.

The report comes on the heels of news that the scholarship will pay for less than half of some schools’ tuition by 2016. Officials with the Georgia Student Finance Commission say by then, University of Georgia students would spend $2,700 in fees and tuition each semester, and the HOPE scholarship would only provide $2,400.

That means scholarship recipients would spend more from their own pockets than the award amount would provide.

Democrats also support an income cap, but Gov. Deal, a Republican, disagrees.

“What they would have us to do is make it truly an entitlement program where children would be denied based on what their parents earned rather than what the children earned in the classroom," he said in an interview. "I think it should remain merit-based and that’s what encourages young people to work hard.”

Deal said a cap would unduly affect students from middle-income families. He also said he thinks the cap the Democrats have suggested, about $140,000 a year to start, is unrealistic. Instead, he accuses them of playing politics.

Alan Essig is with the Georgia Budget and Policy Institute. He says his interest isn't politics, it's economics. In an interview at the state Capitol, he said the state needs to re-think the funding model for these two programs. And he thinks, it should start with pre-K.

“One of the ways to re-think it is, how do we get the biggest education bang for the buck?" he said. "What is best for the economy? How do we get the most out of the limited lottery funds we have? The No. 1 thing we should focus on is the pre-K program.”

Deal says the current lottery funding formula is working fine. He has said he is against additional tweaks to HOPE and pre-K since the state is still seeing the impact of a law passed last year that overhauls the college scholarship program and the amount the lottery remits to the state.

Nonetheless, the cost of attending college now has become the biggest reason students drop out, according to University System of Georgia Chancellor Hank Huckaby.

Officials with the Georgia Student Finance Commission say the lottery would have to provide an additional $100 million each year to avoid the 2016 scenario.

"If the support that they can receive from the HOPE program is lower, it’s going to have an adverse consequence on some students’ being able to stay and complete college,” said Tim Connell, with the commission.

Essig of GBPI also recommends increasing the amount the lottery remits to the state from around 26 percent to 27.5 percent.