Lottery Scholarship Change Clears Senate Panel

The Senate Education Committee passed companion bills Wednesday creating a tiered scholarship approach for the Arkansas Academic Challenge Scholarship lottery program.

The bills, Senate Bill 294 by Sen. Johnny Key (R-Mountain Home) and House Bill 1295 by Rep. Jeremy Gillam (R-Judsonia), would reduce the current lottery scholarship awards of $4,500 and $2,250.

Under the bill, scholarship recipients attending four-year schools would receive $2,000 their freshman year and an additional $1,000 each additional year for three more years, culminating with a $5,000 award their senior years. Students at two-year schools would receive $2,000 per year.

The proposal passed the House on Monday.

The proposal was deemed necessary because more students have qualified for scholarships and less revenues have been collected from lottery sales than expected. About $133 million was awarded in 2012-13, with lottery receipts totaling $97.5 million. An additional $20 million was added from state general revenue funds, as was intended when the program was set up.

The deficit has been covered using part of an $80 million surplus that accumulated when the lottery started, but that surplus is dwindling.

Key said the proposal would provide $14,000 in scholarship funds for students over the four-year period. At the same time, it would reward students for advancing through their college careers.

Shane Broadway, interim director of the Arkansas Department of Higher Education, said in an interview that the bill requires $90 million in net proceeds to be collected per year. “If they don’t, we could be back here in the fiscal session having this same conversation about a different amount,” he said.