January 19, 2008

Walk the Line

Tennessean political columnist Larry Daughtrey put the Democratic spin on the debate over lottery-funded scholarships:

The demographics of lotteries are well known: the poor buy the most tickets and the middle and upper classes get most of the scholarships. The Democrats want to make money available on the basis of need; Republicans, none of whom voted for the lottery in the first place, want to hold the line.

The issues are:

1. Whether the lottery-funded scholarship should remain a scholarship - i.e., something earned via academic performance - or should be turned into an entitlement.

2 Whether academic standards and requirements for earning and keeping a lottery funded scholarship will be lowered or changed.

3. Whether excess lottery revenue will be used to help local governments pay for needed school construction projects, as the legislation creating the lottery envisioned, and if so how much and by what formula or criteria will it be distributed.

On the first, Democrats for the most part want to turn lottery scholarships into an entitlement while Republicans for the most part want to retain the merit aspect of the program in order to keep it a strong incentive for Tennessee high school students to keep their grades up. Republicans understand that turning the program into an entitlement program puts taxpayers on the hook should the number of needs-based students ever eclipse the lottery's revenue. And that reality is more likely if Democrats get their way on the second issue.

That issue is this: Democrats for the most part want to lower academic standards for getting a scholarship. Right now a student must graduate high school with a B average to get a scholarship; Democrats want to lower that to a C average, presumably making thousands more students eligible for the scholarships, which will soak up more lottery revenue.

Republicans such as state Sen. Ron Ramsey, the leader of the Senate, have indicated interest in making it possible for students to retain their scholarships or earn them back if their grades in school dip below a B average, but want to do it in a way that encourages good academic performance. Merely lowering the bar, as Democrats want to do, does not encourage academic achievement.

If the program becomes a needs-based entitlement and academic standards are lowered, as the Democrats want, costs are guaranteed to skyrocket.

If more lottery revenue has to go to scholarships because Democrats lowered standards and made the program a needs-based entitlement, there will be less money for dealing with the third issue.

When voters were considering the lottery amendment a few years ago, they were routinely told that excess lottery revenue would be set aside for helping fund educational programs and school construction. We're already using some lottery money to fund the state's new subsidized day care "Pre-K" program despite a mountain of data that shows that Pre-K has no long term effect on academic performance. Now, it's time to allocate some of the excess funds to help local governments pay for much-needed school construction.

There are other related issues as well. Republicans in the state Senate last year sought to make changes to the scholarship criteria that would make more "non-traditional" college students, including War on Terror veterans, eligible for lottery-funded scholarships. Democrats in the House last year pushed instead to lower the overall eligibility grade average.

This year, Democrats have already begun pushing a separate lottery-funded scholarship for War on Terror vets, but, as I've already demonstrated above, when you tinker with any aspect of the lottery program you impact the money available for other parts.

In the final analysis, Democrats this year will be trying to lower standards and raise costs for scholarships and change it from a reward for academic performance to an entitlement program with no protection for taxpayers against rising costs.

Republicans, on the other hand, will be trying this year to protect the program as a true academic scholarship, protect the fiscal health of the program, protect taxpayers from the cost risks of an entitlement program, and protect the original intent of the lottery, which was to both encourage college enrollment and academic achievement and to help fund educational programs and school construction.

It's a lot more complex than Larry Daughtrey, trotting out tired old class-warfare rhetoric, described it, and that complexity suggests that lottery reform needs a comprehensive approach rather than the Democrats' piecemeal approach in order to ensure a good fiscal and policy outcome for taxpayers and for the students and the higher education system that must accommodate and educate them.

And one more thing: Daughtrey isn't the only Democrat I've heard imply that Republicans who voted against the lottery amendment should not have any say in how the program is structured. That's pure idiocy, like saying that Democrats who opposed cutting the sales tax on food should not be involved in decisions about how the state spends tax revenue.

Republican legislators' constituents elected them to help oversee how the state is governed, and part of that responsibility involves making fiscal and policy decisions regarding the lottery.

Daughtrey got one thing right, though, Republicans do "want to hold the line" - against Democrat lottery reforms that risk bankrupting the lottery funds and putting taxpayers on the hook for an entitlement program, especially one that doesn't encourage good academic performance.