Group: Possible lottery revenue should be used for college scholarship fund

Group: Possible lottery revenue should be used for college scholarship fund

By CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – Legislation to create a state lottery could be coming in the next regular legislative session and one group says potential revenue would be best used to fund college scholarships for low-income Alabamians.

The University of Alabama’s Education Policy Center on Monday released a new report saying scholarships would improve post-secondary education enrollment and completion and in turn improve the state’s workforce and economic development.

“In order to continue to grow our state’s economy and future, it’s essential to have a state education system that encourages workers and students to enroll in college, which will further develop their employable skills,” Jonathan Bowen, a research associate and co-author of the EPC report.

Alabama currently ranks last among Southern Regional Education Board states in state-funded need-based student aid and federal Pell grants have become the state’s de facto student aid program, the report explains.

The average amount of state-funded student aid awarded in Fall 2018 was just $60 while every state boarding Alabama awarded five times that amount, with Tennessee averaging about $2,000. With little state aid, the responsibility for funding financial assistance has fallen on families or high education institutions, creating a barrier for many low-income students from even considering applying for college.

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Creating a state lottery has been an ongoing issue for the state Legislature for many years. Recent proposals have faced roadblocks from competing gambling interests in the state and disagreements about how the revenue should be used.

Rep. Steve Clouse, R-Ozark, brought forward a popular lottery bill earlier this year but told Alabama Daily News that it will depend on what the governor’s study group on gambling says before he submits his legislation. Gov. Kay Ivey is expected to release the group’s results sometime this month.

Timing is also a factor for lottery legislation since a constitutional amendment must be approved by voters meaning the earliest it could be on the ballot is during the next general election in 2022.

“So for this session, it won’t be absolutely imperative, you could do it next year,” Clouse said.

Clouse’s bill for the 2020 regular legislative session had enough House co-sponsors for easy passage in that chamber, but the COVID-19 shortened session made it impossible to continue. His bill split lottery revenue between pre-K program funding and a college scholarship fund.

But Clouse said since the state has made significant gains in funding its pre-K, he would consider just focusing on a college scholarship fund.

“On the scholarships, we’re really going backwards,” Clouse said. “We’re probably right last in the nation on the amount of student aid for community colleges and four-year schools. I am probably looking more toward doing it just all scholarships.”

Previous proposals have sought to send at least some of the lottery proceeds to the states General Fund, which has traditionally faced greater shortfalls than the Education Trust Fund.

The policy that EPC is proposing closely resembles the Tennessee Promise program that began in 2014 with the intent of making the cost of state community and technical colleges tuition-free when combined with other forms of financial aid.

Krissy DeAlejandro, the executive director of Tennessee Promise, explained on Monday that the program takes a holistic approach when looking at student success, providing career mentoring practices.

“It’s about heightening awareness of what does exist if you earn a college credential and really does attempt to change that value proposition of what it means to earn a post-secondary credential,” DeAlejandro said.

A vital part of the Tennessee program that EPC Director Stephen Katsinas believes should be in Alabama’s legislation is a “lockbox account” that protects a percentage of overall lottery proceeds and cannot be repurposed.

“In my opinion, one of the worst things you can possibly do is to make a promise and then not keep it,” Katsinas said.

All of the states bordering Alabama and most others already have a state lottery, which means Alabama dollars are leaving the state.

“They’re building futures on the backs of Alabama taxpayers, so we might as well look to seek to invest where we can in our state’s resources and our future economic development,” Bowen said.

The EPC report estimates that a lottery could provide $280 million in revenue for the first year, which could provide funding for upward of 56,000 students. The proposed Alabama Promise plan the report lays out suggests $200 million provide low-income students scholarships for two-year or technical colleges. The remaining $80 million would go toward helping students going to four-year institutions.

The scholarship program won’t just help post-secondary enrollment but will also help increase high school graduation rates.

“More data shows that if students believe they have the opportunity and means to go to college, they are more likely to graduate from high school,” said Emily Grace Corley, a research associate and co-author of the EPC report.

Florida, Georgia and Tennessee have seen about a 20% increase in high school graduation rates from 1990 to 2018 and show after their state lotteries were put in place, graduation rates continued to go up.

Jim Purcell, executive director of the Alabama Commission on Higher Education, said he likes the idea of using lottery revenue for a college scholarship program.

“The report does a great job showing how far Alabama is behind surrounding states in financial aid support for citizens attending college,” Purcell told ADN. “It is my hope that the task force assigned to study the lottery will take an in-depth look at this report in its deliberations.”