SC: The Helping Outstanding Pupils Educationally (HOPE) Act (Statute)

[Anna Komnene]

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Sponsor: Santander

The floor is now open for debate.

[Anna Komnene]

I think this is a creative and interesting bill, but I can't help but feel like using a lottery to fund education scholarships is a bit... bizarre?  Could you explain to me why this is the best way?

[Associate Justice PiT]

     I like this, but what happens when the funds from the lottery are used up for that year? The criteria for receiving the HOPE Scholarships are all objective, so it seems to me that this could be creating a mandate for us to fund near-full ride scholarships for all qualifying students.

[Terry the Fat Shark]

Are we still debating on this?

[Santander]

I think this is a creative and interesting bill, but I can't help but feel like using a lottery to fund education scholarships is a bit... bizarre?  Could you explain to me why this is the best way?

I based it on Georgia's education lottery, which was established under Zell Miller in the early 90s. People don't like taxes, but they do like lotteries, and this is a small-government, voluntarily-funded way to provide highly-subsidized college education to our residents. I added in some provisions to mitigate the negative effects of introducing lottery gambling, such as funding for addiction treatment and a prohibition on offering online or sports gambling.

     I like this, but what happens when the funds from the lottery are used up for that year? The criteria for receiving the HOPE Scholarships are all objective, so it seems to me that this could be creating a mandate for us to fund near-full ride scholarships for all qualifying students.

Most of the bill's specifics, such as eligibility, scholarship amount, and lottery revenues transferred to the state were based on the real-life Georgia Lottery and HOPE Scholarship, including the reforms made under Nathan Deal to keep the program financially sound. One major difference is that this version of HOPE only allows students to attend state schools, while the real-life HOPE program allows students to attend non-profit private schools. I think limiting it to state schools would help keep brainpower in the public university system and improve the program's solvency. Of course, we can also add an amendment saying that only lottery funds may be used to fund scholarships under this program.

[Associate Justice PiT]

I have been thinking about this a bit, and I have some concerns.  I understand that lotteries are a common thing and people like to play them.  I'm not opposed to having a lottery, but I'm not so sure about linking the revenue to a scholarship program.  Studies have shown that apparently people that play lotteries skew to the lower incomes, so essentially some wealthy families that never played the lottery because they don't need to or want to potentially get to send their kids to college for (nearly) free without ever having to contribute to the program at all.  That doesn't seem quite fair to me.

     I mean, playing in the lottery is voluntary; any person reserves the right to not contribute to this scholarship. If it would help assuage your concerns of subsidizing the wealthy on the backs of the poor, I would not be opposed to some sort of family income-limit to receive the scholarship.

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     If the lottery is set up properly then this is not an issue. Working off of the probabilities involved, I imagine the amounts remitted to the scholarship fund would be pretty consistent over time. I'll admit that I haven't done research on this, though.

Most of the bill's specifics, such as eligibility, scholarship amount, and lottery revenues transferred to the state were based on the real-life Georgia Lottery and HOPE Scholarship, including the reforms made under Nathan Deal to keep the program financially sound. One major difference is that this version of HOPE only allows students to attend state schools, while the real-life HOPE program allows students to attend non-profit private schools. I think limiting it to state schools would help keep brainpower in the public university system and improve the program's solvency. Of course, we can also add an amendment saying that only lottery funds may be used to fund scholarships under this program.

     It pleases me to know that this is based on a successful real-life program, but I would appreciate such an amendment. The risk of an adverse court ruling saying that we must provide as much funding as is needed for all qualifying students could place a heavy burden on the region's finances.

[Santander]

I have been thinking about this a bit, and I have some concerns.  I understand that lotteries are a common thing and people like to play them.  I'm not opposed to having a lottery, but I'm not so sure about linking the revenue to a scholarship program.  Studies have shown that apparently people that play lotteries skew to the lower incomes, so essentially some wealthy families that never played the lottery because they don't need to or want to potentially get to send their kids to college for (nearly) free without ever having to contribute to the program at all.  That doesn't seem quite fair to me.

You raise valid concerns, but lotteries are entirely voluntary. Those who do not play the lottery cannot win prizes. I believe this lottery has been designed in a socially responsible way that returns a higher than average amount to the players. If you still have concerns, we could make lottery winnings exempt from regional taxation, which would shift the income tax burden away from lottery players.

I also have some concerns about the fairness of the lottery when it's run by a bureaucracy that needs a certain amount of money in order to function.  If the fund ever starts to get on the low end, there will be an incentive to lower the chances of winning.  That incentive might even exist if the fund isn't low because officials will still probably be held responsible for meeting certain profit thresholds.

The Corporation is government-owned, and is basically run as a non-profit corporation. Lotteries have tried to reduce payouts in order to improve profitability, but it does not work, because fewer people play the lottery when prizes are smaller and/or harder to win. The "as nearly as practical" language was included in clause 8 to allow Corporation management to determine the most fiscally prudent percentage to transfer. If we determine that the lottery is generating higher than expected revenues, the Legislature can consider funding some other programs so that the money is put to good use. (e.g. non-profit private colleges, further grants for low-income students, etc.)

And lastly, the part about excluding people with student debt problems.  I'm not sure how that relates to being eligible for a merit based scholarship.

That is standard language. Colleges and universities do not even permit students to enroll until they've cleared their financial obligations with other educational institutions. Student loans are voluntary programs, and if someone is in default on another government financial aid program, it does not make sense to give them another one.

[Anna Komnene]

Is anyone planning to offer any amendments?

[Santander]

I would like to offer the following amendment:

Application
24. Only funds transferred by the Corporation to the South Government may be used to fund the programs described in this Act.
25. If the funds transferred by the Corporation to the South Government are insufficient to fund the programs described in this Act, the Secretary of Education may change program eligibility or scholarship/grant amounts for the fiscal year in which the funding shortfall occurs to maintain the financial viability of the program.

[Anna Komnene]

Seeing no further debate or amendments, we will now have a final vote.  Members will vote AYE, NAY, or ABSTAIN.  This will be a 48 hour vote.

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[Santander]

Aye

[Terry the Fat Shark]

AYE

[President of the great nation of 🏳️‍⚧️]

AYE

[Anna Komnene]

Nay

[Anna Komnene]

Voting is now closed.  The AYEs are 3, and the NAYs are 1, with 1 not voting.  The AYEs have it, and the bill has passed.  The bill is now passed onto the Governor for his signature or veto.

[Associate Justice PiT]

     X PiT, South Governor

[Santander]

Thank you Governor! Today is a great day for young minds in the South.