Lottery committees focus on scholarships, charity games

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Posted 9:32PM on Monday, December 16, 2002

NASHVILLE, TENNESSEE - The General Assembly won't convene for another four weeks, but Lotto Fever already has struck Legislative Plaza. A task force of educators and lawmakers met Monday to discuss the best design for a lottery-funded scholarship program. The big question: Should scholarships be based on need, merit or a combination of both? A separate committee began exploring the benefits and potential drawbacks of letting 501(c)3 charitable groups conduct lottery-style fund-raisers. ``Run like hell,'' quipped Barbara Toms, director of the state Division of Charitable Solicitations, when asked what she'd learned from studying other states' experiences. Tuesday, a group of legislators will board a chartered bus and take a five-hour trip to Atlanta to tour Georgia Lottery headquarters. On Wednesday, they'll explore the operations of Georgia's major lottery vendors: GTECH Corp. and Scientific Games. ``I'd hope we'd have some legislation by February, maybe a Valentine's Day gift,'' said state Sen. Steve Cohen, the Memphis Democrat who has pushed 18 years for a lottery. Cohen leads the House-Senate lottery information and recommendation committee. The flurry of activity follows voters' approval of the Nov. 5 lottery referendum, which cleared the way for the General Assembly to create a lottery earmarked for college scholarships and other education programs. The referendum also authorized lawmakers, with a two-thirds vote of both houses, to approve annual lottery-type events to benefit 501(c)3 organizations. The education task force heard Monday from Georgia State University researchers Gary Henry and Ross Rubenstein, who have studied Georgia's HOPE Scholarship program since it started in 1993; and Penn State University researcher Donald Heller, who has studied merit-based scholarship programs in 12 states. Henry and Rubenstein touted the success of Georgia's program. It offers free tuition, books and fees to students who finish high school with ``B'' or better averages. ``The ability of parents and students in Georgia to count on HOPE scholarships has been a great boon to the state,'' Henry said in a video teleconference from Atlanta. Heller, who addressed the task force in Nashville, agreed that Georgia has kept many of its ``best and brightest'' students in state by offering HOPE scholarships. But 96 percent of the recipients would have attended college anyway, Heller said, indicating the program did little to increase poor students' access to higher education. It would cost Tennessee about $150 million a year to fund a Georgia-style scholarship program, said Brian Noland, the Tennessee Higher Education Commission's director of academic affairs. The Tennessee Advisory Commission on Intergovernmental Relations estimates a lottery would gross about $880 million a year, with roughly $282 million for education programs. Based on those estimates, the state would have about $132 million left for preschool and after-school programs and K-12 construction and technology, Cohen said. He stressed that many also support making family income a criteria for scholarships. Some task force members proposed investing more money at the front end putting lottery funds into preschool programs. ``It's very difficult to change attitudes,'' said member Douglas Wood, the state Board of Education's executive director. ``You can certainly enable a change in behavior.'' Of the 35,000 at-risk preschoolers in Tennessee, just 15,000 are served by HEAD Start, Wood said. Another 1,200 are in pilot programs. ``The rest are not being served at all,'' he said. Providing preschool for them would take roughly $100 million a year but help ensure ``these kids eventually go to college,'' Wood said. As the 501(c)3 committee, chaired by retiring Sen. Bob Rochelle, opened its two-day meeting, discussion centered on how to monitor charity games and avoid a repeat of Tennessee's ``Rocky Top'' bingo scandal. Ironically, committee member John D. Lee, president and CEO of the Boys and Girls Clubs of Knoxville, sat next to former Attorney General John Knox Walkup, also on the committee. ``I'm here because Mr. Walkup here issued a cease and desist order in 1997,'' Lee joked. For several years, people paid $5 each to ``adopt'' yellow plastic ducks as part of a fund-raiser by Lee's organization. But in 1997, Walkup deemed the duck race a lottery prohibited by the constitution. The state Supreme Court ruled in 1989 that bingos and raffles were unconstitutional. The decision followed the ``Rocky Top'' bingo scandal, which involved games operated by scam artists using charities as fronts and resulted in dozens of arrests across the state. Under the constitutional amendment, it appears the Legislature would have to approve each charity game and there could be thousands of applications. That's one question committee members will ask when they meet Tuesday with Attorney General Paul Summers.