|Updated: 9/21/2012 4:42 pm
||Published: 9/21/2012 4:29 pm
LITTLE ROCK, Ark. (AP) - As legislators look to plug a $23 million projected shortfall in lottery-funded college scholarships, Gov. Mike Beebe said not to expect any additional money from the state's general fund.
Legislators this week began exploring ideas on how to stretch available revenues while also finding a way to better target scholarship awards to students most likely to complete college. A little more than 40 percent of lottery scholarship recipients haven't remained eligible for their awards, because they dropped out or didn't maintain enough credit hours or a 2.5 grade-point average.
State Sen. Johnny Key, R-Mountain Home, proposed cutting scholarship awards to freshmen from the current rate of $4,500 per year to $2,000 per year. The scholarship would increase by $1,000 each year a student remains eligible, up to four years.
Former Lt. Gov. Bill Halter, who spearheaded the effort to put the lottery measure on the ballot, attended the Lottery Oversight Committee meeting on the topic earlier this week and criticized lawmakers for moving away from the intent of making lottery scholarships available to a broad base of students.
Instead of cutting scholarship awards, Halter suggested pumping more money into scholarships.
"There are other things that can be saved out of the state budget and redirected to one of our highest return investments, which is higher education," Halter said.
He said sharp increases in college enrollment in the three years the scholarships have been awarded show the effectiveness of the program. An increase in demand for scholarships should be addressed by trying to find more money, Halter said.
"More students qualified than the Legislature had planned. That is a good thing," Halter said Friday, adding that having a better educated populace boosts economic development.
Beebe said the scholarship program, which has retained $20 million in annual state funding outside of the lottery, has plenty of money.
"We have more than quintupled scholarship money with the lottery. I mean you can't get much better than that," he said.
The governor said there are other pressing budget priorities above finding more money for the scholarships.
"All the extra money we've got right now it's either got to go to (public schools) or to Medicaid shortfall," Beebe said.
The state is facing a Medicaid shortfall that's projected to be as high as $400 million in the fiscal year that starts July 1. The topic is likely to dominate the regular legislative session that begins in January.
Key said his proposal would not reduce scholarship amounts for students already receiving money but would start with the freshman class of 2013.
Beebe, who said during the lottery campaign that he voted against the measure, also said sustaining scholarship amounts once students get the awards is important.
"One of the things I've constantly said is: Whatever adjustments you make, you keep your promise to the ones that you made the promise to," Beebe said. "So, whatever a freshman starts at, in terms of money, leave it that way for the four years, if they make their grades and keep their scholarship eligible."
Currently, students at four-year schools receive $4,500 and those at community colleges receive $2,250. The first class receiving lottery scholarships, in the 2010-2011 academic year, was awarded $5,000 and $2,500.
Halter, who is exploring a run for governor, said the scholarship program is worth building upon.
"Look at the size of total expenditures in the state of Arkansas ... and compare it to what we are spending on scholarship assistance. It is a very, very small percentage of the overall state budget," he said.
Halter wouldn't comment on what specific state programs could be cut.
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