The Georgia Senate study committee on Hope scholarships will hold its final meeting January 5 to try to find a way to boost funding for the beleaguered program that helps high school students attend college at no or low cost. Currently the state lottery funds the program but lawmakers claim it’s under-funded. One alternative source of funding under discussion is expanding gambling in the state to collect parimutuel and/or casino tax revenue.
The lottery is the only form of gambling allowed in Georgia at this time, besides some forms of charitable gaming, like bingo. Only Utah and Hawaii allow less gambling—none at all.
Study committee member state Senator Valencia Seay said a referendum to change the state constitution should be held to let voters decide if they want casino gambling in Georgia. Another study committee member, state Senate Majority Leader Bill Cowsert, said whether or not the “destination-resort-casino option” eventually funds Hope scholarships, the lottery still should provide much of the program’s revenue. He noted under state law, 35 percent of lottery revenue is supposed to go toward the scholarships. “In fiscal year 2014, the lottery transferred 23.5 percent of sales back to the state. This has been the trend over the past five years. We must require the Lottery Board to comply with the law,” Cowsert said.
He added in 2014 the lottery posted the fifth highest gross sales compared to other lotteries in the U.S., but directed the second lowest percentage of sales back to the state. “We have some room for improvement. If we could increase the profits to 35 percent, as mandated, it would generate an additional $460 million per year for Hope scholarships. Each one percent increase equals roughly $40 million per year,” he stated, adding that any tax on casino gambling or horse race betting must be equal to or exceed the 35 percent lottery requirement. “Otherwise any cannibalization of lottery sales will result in a net loss of Hope funds,” Cowsert added.
Study committee member state Senator Harold Jones II said the group believes casino gambling is a “potentially good option.” But he added, “As a former prosecutor, I know it could potentially cause more crime. But I would also say that some of the ideas that have been brought forward try to address some of those issues,” including a provision to set aside grant money from casinos to help problem gamblers and law enforcement.
The House study committee held its final meeting December 10 and is expected to publish its report on Hope scholarship funding this week.
In the meantime, pro-casino and parimutuel gambling lobbyists are signing up with the Georgia Ethics Commission in anticipation of the 2016 legislative session. State Rep. Regina Quick said, “Based on the number of registered lobbyist for casino gambling and horse racing, somebody thinks something is going to happen.” She said she believed 25 to 28 lobbyists already had registered for gambling interests; 14 were hired by MGM Resorts International.
Opposing groups include the Faith and Freedom Coalition, headed by Ralph Reed. As a “social welfare” organization, it’s not required to report the source of its funds.
Governor Nathan Deal also plays a role in the scenario. In 2012 a majority of Republicans sent him a bill authorizing a casino with proceeds going to education. Deal vetoed it and said he wanted to see a “larger majority” before he’d sign such a bill. Earlier this year he said he may okay a casino if the tax rate was high enough. However, his signature would not be required on a casino bill if a two-thirds majority in both houses approved it.
