Posted 11/20/2012 06:21 pm
Updated 6 months ago
Legislators were told Tuesday that lottery-funded scholarship amounts could take a dive for future recipients as the state-run gambling operation isn't pulling in as much money as expected.
Higher Education Department Interim Director Shane Broadway explained that if scholarships are kept at their current levels, the state's obligation would go beyond what the lottery is raising and would also wipe out a $20 million contingency fund.
Arkansas Academic Challenge scholarship award recipients attending four-year institutions currently receive $4,500 and those at community colleges get $2,250. That's less than the $5,000 and $2,500 the first class of recipients received in 2010.
The Legislative Lottery Oversight Committee didn't make a recommendation Tuesday and its co-chairmen, Rep. Mark Perry, D-Little Rock, and Sen. Johnny Key, R-Mountain View, said there doesn't appear to be a consensus.
Broadway provided a set of projected fund balances, which can stay in the black if scholarship levels are reduced to $3,300 and $1,650.
Rep. Barry Hyde, D-North Little Rock, and Key have complained about the high number of students who don't retain their scholarships.
"We need to look at qualifications," Hyde said.
Key has proposed a tiered system, under which freshmen would receive $2,000, with $1,000 added for each year the student is in school, topping out at $5,000 in a student's senior year. That would reward students for keeping their scholarships.
Broadway supplied proposed budget figures that showed the state can afford that system.
Lottery Director Bishop Woosley said sales are down for the first four months of the 2013 fiscal year and that if the trend continues the lottery could be looking at between $89 million and $90 million available for scholarships, about 10 percent less than the $98 million in the year's budget projection.
Ticket sales for draw games are down. Arkansas leads the nation in the proportion of instant tickets it sells but sales of scratch tickets are down, too.
"We're beginning to see a trend of (instant ticket sales) declining each month," Woosley said.
Sales for October were down by $1 million from October 2012, he said.
Year-to-date net proceeds are down $2.6 million, compared to the first four months of fiscal 2012. The state's fiscal year begins July 1.
Woosley said the economy, the drought and high gas prices all contributed to lagging sales, as did the fact that the lottery has been around for several years and the initial buzz has worn off.
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