Story Published:
Mar 3, 2011 at 7:17 PM CDT
Story Updated:
Mar 3, 2011 at 7:17 PM CDT
When the government initiates programs whereby people gain incentives from the State treasuries, those incentives are doomed to failure somewhere down the road. Look at the several states that aren't able to sustain public employees' pensions and healthcare. These states, Wisconsin being the poster child, are broke--flat broke. Yet the recipient of State largess are dismayed when their gravy trains derail. With the current economy, states can't raise taxes so they have to cut expenses to the bone--and, in some cases, bone marrow has to go as well.
The latest government give-away program that is just unsustainable is the Hope Scholarship Fund that was authorized by the Tennessee Legislature, either the 102nd or 103rd General Assembly. The Hope Scholarship began in January, 2004 and was an instant success. The money rolled in from the State Lottery. The entire program was modeled after the Hope Program in Georgia. As a matter of fact, Rebecca Paul, now Rebecca Paul Hargrove, was hired by Tennessee as Executive Director of the Tennessee State Lottery.
In the ensuing years, the Legislature has made it easier for high school seniors to qualify for a scholarship. They also made it easier for incumbent students to keep their scholarships via QPA. As another anchor to the program, more assets were added to which monies were distributed. The economy also has soured for the past several years, so less money has flowed from the Lottery to keep Hope afloat.
In Tennessee, high school seniors with a 3.0 GPA or a 24 on the ACT qualify for $4k per year. We have been using Lottery reserves since 2008 when the 105th General Assembly voted to lower the grade requirement and shifted some Lottery money to other education programs. Reserves sit at about $370m. How long will that last? There may be a means test for Tennessee Hope scholarships.
In Georgia, generous awards are made in its program that started in 1993. More than one million students have been served. There is no restriction on income. Hope in Georgia pays for a full degree, costs the State more than $639m a year and covers some 236k students. As Will Doyle, a Vanderbilt researcher has said, "These programs weren't built to last."
