ATLANTA -- Georgia lawmakers are poised to lower Georgia lottery payouts in order to put more money into HOPE scholarships. The shift could raise $80 million more for HOPE and pre-K in the first year, if it passes the legislature.
The gradual erosion of the HOPE scholarship’s ability to fully pay for college tuitions has vexed lawmakers for years. But, the proposed solution comes with some risks.
The Georgia Lottery says it is one of the most successful state-run lotteries in America – rich in sales, and in delivering nearly a billion dollars to HOPE scholarships and pre-K programs in fiscal year 2015.
But some powerful lawmakers say that money isn’t enough. "So we will have legislation to make the lottery board more profitable," said Sen. Bill Cowsert (R-Athens), the state Senate's majority leader.
Republican leaders at the Capitol want to adjust who makes what from lottery sales. After you figure in overhead for retailers and lottery administration, the lottery pays 64-and-a-half percent of its proceeds to lottery players – while paying 25 percent to HOPE and pre-K programs.
"Average nationwide return on the (lottery) dollar is about 30 cents on the dollar. We’re well below the national average," Cowsert said. Cowsert said an adjustment would not only re-shape the formula, but also look for savings in administration of the lottery.
But lottery officials have argued their existing formula maximizes revenue for education – and that reducing payouts will dampen enthusiasm to play and reduce the overall pot.
"That’s the criticism," said Sen. David Shafer (R-Duluth), the Senate President Pro Tempore. "And obviously we’ve got to craft a solution that takes into account that criticism, and make sure that whatever we propose doesn’t have unintended consequences."
GOP leaders say their plan would make adjustments if the new formula markedly changes the overall revenue coming from the lottery.
Republican leaders say changing the HOPE scholarship formula may also diminish the appeal of casino gambling, which has also been pitched as a moneymaker for HOPE. A casino bill hasn't yet been filed for the coming legislative session; a casino gambling bill introduced last year never got a vote.