HOPE And Coincidence

Today’s Courier Herald Column:

Reform of the HOPE scholarship was the signature legislative accomplishment of Governor Nathan Deal during the 2011 session of the General Assembly.  HOPE, having assumed a “third rail” position among Georgia’s most revered political programs, was spending more than the Georgia Lottery was bringing in.  Compounding the problem, Georgia college tuition rates have continued to rise significantly faster than the rate of inflation, while lottery revenues appear to have reached a natural peak.

Governor Deal worked with House Minority Leader Stacey Abrams on a plan to tweak the payouts from HOPE.   Abrams was able to successfully gain some adjustments from the Governor in exchange for support from some House Democrats, with most of the Governor’s package remaining intact.  Only the highest performing students would continue to receive full HOPE grants, with most students receiving less than full tuition.

Senator Jason Carter greeted the proposal in the Senate with charts showing legislators how HOPE reform would affect students in their districts, versus the effects of a Democratic alternative to means test scholarships.  In stark detail, many rural legislators were shown that they could vote for an alternative that would keep significantly more students from their districts on HOPE under a means tested program.  The balance would be taken from mostly suburban Atlanta counties, where means testing would end up with almost one third of students from wealthier counties losing their scholarships.

Carter’s efforts temporarily stalled the bill in the Senate.  Partially reflecting a power shift from rural Georgia to the Republican dominated Atlanta suburbs, and perhaps more importantly, with Republican leadership not wanting to torpedo a new Republican Governor’s first major legislative initiative, Deal’s proposal passed the Senate and was signed into law.

In late fall, new numbers from the Georgia Student Finance Commission and the Georgia Lottery Corporation began to sound new alarm bells.  It seems that 5,000 more students qualified for the full ride Zell Miller Scholarships than were expected.  Meanwhile, lottery revenue remains relatively flat.  Alarm bells were again sounded that HOPE could have expenses surpass revenue within two years.

Senate Democrats filed SB 336 on Tuesday, proposing an income cap of $140,000 for parents whose children are eligible to receive HOPE.  Zell Miller scholars would be exempt from the means testing.  The income limit would be set annually by the Georgia Student Finance Commission to maximize the number of HOPE eligible students.

Just weeks before the new HOPE projections began to leak, a study commissioned by the Georgia Lottery Corporation was revealed by an AJC open records request demonstrating how much revenue could be produced by casinos in Atlanta, Savannah, and Jekyll Island.  The proposal was quickly shot down by the Governor, who is opposed to casino gambling in Georgia and does not appear to look favorably toward Georgia Lottery Corporation operating video lottery games in a casino format.

The new HOPE projections began leaking within days of the rebuke of the casino plan from the Governor’s office.  One could believe this was a mere coincidence, and coincidences are technically possible in political situations.  They are rare when billions of dollars – and who produces and controls them – are at stake.

It is clear that there are organized, connected, and well financed interests who want a casino located at Underground Atlanta.  They are prepared, once again, to promise to alleviate the pain if they could just partner with the Georgia Lottery Corporation to offer video poker and video slot machine lottery games in a Downtown Casino.  They would certainly be willing to operate on the Georgia coast as well, but the Georgia Lottery Commission’s report made it clear that Atlanta is the prize.

If an extension into gambling by GLC is rejected, the alternative to a casino is more cuts to HOPE recipients.  Either students from upper income families that don’t have a 3.7 GPA can be excluded completely, or the per student payout will continue to decrease.

These cuts will have to happen starting in two years according to the newest projections.  That’s about the same time it would take to redevelop Underground into a casino.  But that, as well, could be just another coincidence.

21 comments

  1. Three Jack says:

    So called conservatives on both the state and federal level have joined with dems to promote class warfare/means testing. This HOPE debacle is proof once again that government is incapable of doing what it is not supposed to do….redistribute wealth.

    If the GOP controlled legislature decides to punish families earning $140K in order to favor other families, I hope they get ready for yet another court challenge.

    • ndayspring says:

      You realize that HOPE is funded entirely by Lottery money. Lottery tickets are, in the majority, purchased by lower income households. So, Three Jack, you must realize that the system, as it stands without means testing, is a redistribution of wealth from the poor to the rich. For some reason, this is the only transfer Conservatives seem to never be up in arms over.

      • Calypso says:

        “…the system, as it stands without means testing, is a redistribution of wealth…”

        Somehow, you conveniently left out the all important word ‘voluntary’ between the word ‘a’ and the word ‘redistribution’ in your silly response to Three Jack.

        • ndayspring says:

          Because it was irrelevant. His argument is that, with the Democrat’s suggested changes, the system would be “WEALTH REDISTRIBUTION, OH NOES!” I point out that it’s much more of a wealth redistribution now, since most of the HOPE money comes from lower-income people (as they are the ones who purchase the majority of lotto tickets).
          In either scenario, it’s voluntary. Under the Democratic scenario, no one forces families making over $140k to purchase lotto tickets. But, the point I’m making, is that Three Jack only seems to have a problem with wealth redistribution when money goes from the rich to the poor, as opposed to the other way around.

          • Calypso says:

            But by your example the proceeds of a lottery ticket I voluntarily buy will not be seen by my children in the form of HOPE because I am ruled out due to my income level.

            I do understand your point, however, when described as above.

            • ndayspring says:

              To your first statement, again, I don’t find this particularly relevant. You voluntarily purchase a ticket that grants you a chance to win money (you pay money and get a product). The proceeds from that sale go to help people go to college, perhaps a certain group of people, not everyone. If that scenario alone is wealth redistribution to get up in arms about, you should probably be up in arms about capitalism as a whole. Think about it: You go and buy a happy meal which provides you sustenance (pay money, get a product). But your kids don’t get to see the money you just paid to McDonalds. That money goes to a corporation and to a ton of low-paid workers, who then benefit from it. WEALTH REDISTRIBUTION!
              Now here’s where I assume we won’t agree, but I’ll make my case: Additionally, think about the system as it stands: As Zell Miller grants continue to eat up a larger and larger portion of the lottery funds (and those grants, on the whole, go to more metropolitan, upper class kids, as many rural schools don’t have the same resources to provide things like AP classes for children, let alone the cost of signing up for the test), money from low income families who purchase lottery tickets inevitably ends up going to metro-Atlanta upper middle class kids for full-ride educations. So while it’s not written into law specifically that lower income people can’t qualify for ZM, that’s pretty much the effect of the law.
              The main point here is that Three Jack is a crackpot, and “Wealth redistribution,” as used here is just a red herring for kooks. No matter how this works, there’s going to be people voluntarily paying money for a service, others getting a benefit: it just comes down to an argument between groups as to what is the “fair” or perhaps the most efficient way to spend those funds.

  2. The Last Democrat in Georgia says:

    I’m not a big proponent of gambling, but couldn’t they at least come up with something better than video poker machines in what is the equivalent of a dark, drafty basement at Underground Atlanta?

    Couldn’t we at least do something a bit more high-brow than just a few video poker machines, which seem to better belong at the roadside convenience store than being the centerpiece of a casino?

    • dsean says:

      I am a big proponent of gambling and totally agree with you. My biggest objection to the proposed Underground Atlanta Casino is that it isn’t bold enough. Video poker and slots are fine, but when I think of the way it’s likely to be executed, I think of the most depressing casino in Atlantic City – sad, dark, reeking of smoke and broken dreams.

      If Atlanta wants to do a casino, I could be for it, but make it a destination. Have table games, shows, and restaurants. Some vitality to it. That way tourists at the Congress Center, fans from the Dome, etc., would see it as an obvious place to kill some time and spend a few dollars. Instead, the proposal sounds like the equivalent of the slot machines that are in Vegas gas stations – sad and unused.

      • NoTeabagging says:

        We should promote ‘cultural tourism’ rather than ‘Got broke? get lost’ tourism. Cultural tourism is shown to provide more local income and create more jobs than casino cities. Tourist spend more on local attractions, restaurants, buy local made goods and stay longer at hotels. Underground Atlanta could become a showcase for arts and entertainment rather than a money pit that benefits a few well connected folks.

        Conventioneers rarely have time to ‘See the Sites’ outside a tight schedule of meetings or market gatherings. I have a family member that comes twice a year to ATL markets, never has time to meet for dinner. he also went to Las Vegas markets, same thing – no time to even darken a casino door.

        We need to attract a different kind of tourist, build on the strength of our current arts and attractions. Imagine ATL as a metropolitan version of Asheville, NC. I would find that far more attractive.

  3. sunkawakan says:

    And I hope you’ll be suing every charitable organization, corporation, etc. that has means testing for scholarship money as well.

    • Three Jack says:

      sunkawakan, Big difference; those are private organizations, HOPE is funded by the quasi-government GLC.

      One more point about HOPE. It is an aconym — Helping Outstanding Pupils Educationally — no mention of ‘unless your parents worked too hard toward prosperity’.

      If republicans are going to join with dems in this class warfare/means testing agenda, then we really do need to start the formation of a third party. Governor Mitch Daniels in his SOTU response last night talked about the wealthy not needing SS or Medicare…they should just donate their forced contributions to those less fortunate than themselves.

      Keep dipping the bucket into the wealthy well and eventually it will dry up. Where will the bureaucrats turn when this inevitably happens?

      • sunkawakan says:

        So what if they’re private organizations? Does that mean they have to live by different laws than our own government? You state “court challenge” and I’m trying to understand what legal theory that this challenge will employ.

        And I’m assuming that you’ll next go after our progressive (really, Mitt Romney?) tax code armed with that precedent?

        And what will you do when you find that there’s a maximum income level at which you’re taxed for FICA? Doesn’t that fly in the face of the “spread the wealth” argument you’re making, since really, really rich people don’t pay as much tax on a percertage basis as the rest of us?

      • benevolus says:

        But we already know that capitalism is flawed in that it pre-disposes the rich to get richer and the poor to get poorer. We’ve been through this a couple of times before. There has to be some controls or we end up with feudalism again or a few “robber barons” controlling everything.

        Besides, we clearly have not dipped in to the wealthy well too much yet:
        http://news.yahoo.com/blogs/lookout/separate-unequal-charts-show-growing-rich-poor-gap-20110223-141311-132.html

      • ndayspring says:

        “One more point about HOPE. It is an aconym — Helping Outstanding Pupils Educationally — no mention of ‘unless your parents worked too hard toward prosperity’.” – This is not a point about HOPE, it’s a point about how perhaps someone shouldn’t try to derive legislative intent from the snappy acronyms politicians constantly apply to their legislation.
        If you want to make a point about HOPE, and whether it was intended to help less fortunate Georgians pay for college educations they would otherwise be unable to afford, please note that during the first year of HOPE, the scholarship had a SIXTY THOUSAND DOLLAR INCOME CAP. I think that rather easily disproves your nuttery, on the HOPE issue at least.

        • Three Jack says:

          ndayspring…Actually it was $100k, but why pick nits. I voted against it then, still oppose it now because as anybody could have predicted, cost of tuition has risen unabated since quasi-government funded HOPE became the source for most Georgia students to pay for higher education.

          The GOP should introduce legislation to end the HOPE scholarship if the only alternative is generating class warfare through government forced means testing….it never works. Cost of tuition would come down, youngsters would have to actually earn their way through college like previous generations (builds character) and lottery funds could be diverted to transportaion needs where many more would benefit.

          You can call me a crackpot, kook or whatever other name pops into your pea sized mass impersonating a brain. It won’t change the fact that HOPE is one more failed government redistribution program.

  4. CobbGOPer says:

    Raw Deal and the state GOP leadership are so down on the gambling thing (ironic since – as much as people want to think otherwise – buying a lottery ticket IS gambling) and refuse to consider casinos, despite the fact that they would be a tourist draw and an economic benefit to Atlanta and the state in terms of tax revenues.

    Instead they’ll just increase their targeted sin taxes on smokers and drinkers.

    • sunkawakan says:

      I recall Chip Rogers pushing back against taxing smokers, citing a supposed article in Reason magazine that indicated that teens would smoke more pot if cigarettes were more expensive.

  5. NoTeabagging says:

    Ok, let’s see if I’ve got this right. HOPE is funded by GA Lottery which produces X dollars for scholarships. $X = #Y scholarships. #Y > $X so fewer students can receive full scholarship benefits.

    Perhaps a lottery is needed to decide who gets the scholarships?

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