Georgia View: Betting On Hope

Youth may in fact be “wasted” on the young, but there are few population segments in Georgia facing a potentially more devastating economic triple threat than high school seniors and college students. Drastic cuts in the state budget are likely to cause tuition increases next year at the same time the HOPE scholarship pot of gold is running low

Few offerings from the state of Georgia are as popular as the HOPE Scholarship, although the Constitutional amendment that allowed the creation of the Georgia Lottery and subsequent funding of HOPE passed by less than 100,000 votes in 1992. Now, nearly 1.3 million HOPE scholars and $5.6 billion in educational support later, perhaps the only state program as popular is its lottery-funded sibling, Georgia Pre-K. So popular that despite consistent growth in lottery gaming revenues, demand has out-stripped supply.

The Georgia Lottery Commission is now deficit spending and dipping into cash reserves, which will be depleted as early as 2013.

So discussion under and around the Gold Dome has focused for months on whether to cut benefits, raise eligibility requirements or eliminate many of the popular expansions to HOPE funding.

Capping benefits to a fixed dollar amount is very attractive to state budget writers, but “mostly free” or “somewhat free” college tuition just doesn’t have the same ring to it. To all too many high-performing high-school students, it sounds like a broken promise.

Despite the need to cut some obvious extensions and fat from the HOPE chest largesse, such as funding remedial education (pretty far afield from rewarding academic excellence), there is a plain, clear and safe bet already within arms’ length, available at practically no cost.

Seven other states have expanded their lotteries to include Video Lottery Terminals, VLTs, which look like slot machines but operate largely like the machines already available for scratch games at Hartsfield-Jackson Atlanta International Airport, or use technology very similar to the “Quik Pik” option that thousands of lottery customers use across Georgia every day.

In small states with only a fraction of Georgia’s or Atlanta’s population, VLT casinos are generating big bucks. In Delaware, a state with 900,000 residents, VLTs generated $300 million in gaming revenues in 2008. In Rhode Island, which has fewer VLT machines and a slightly larger population, the 2008 revenues were $296 million; and in the largely blue-collar economy of West Virginia, more machines and a population of 1.8 million generated sales of $617 million in 2008.

In Georgia, the current funding gap and projected deficit for HOPE is roughly $300 million, before program cuts are made.

Developers Dan O’Leary and John Aderhold have a proposal to build a $500-million hotel and VLT casino at Underground Atlanta, just a stone’s throw from the Gold Dome. And just think what VLT casinos could do on riverboats on the Savannah River as a boon to tourism in Augusta and Savannah.

Casino cruises already depart the Georgia coast, but those revenues do not benefit HOPE scholars or Georgia taxpayers. Allowing VLTs is already within the purview of the Georgia Lottery Commission and requires no new legislation.

Georgia’s former Attorney General Thurbert Baker also floated a promising proposal for expanding bingo gaming to benefit HOPE, allowing churches and other nonprofits to enter the market and contribute to HOPE funding. It is reasonably apparent to the casual observer that the entertainment and gaming choices offered by scratch tickets, bingo, Powerball and multi-state games and VLTs all simply broaden the consumer product offering, as well as appeal differently to specific demographic segments.

Revitalizing Underground Atlanta has the companion benefits of new jobs, increased tourism and a more vibrant downtown Atlanta.

The lottery commission should take this bold but safe bet to re-fill the HOPE chest, while also lifting quite a few boats in downtown Atlanta south of Five Points. Care to wager, anyone?

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