This past week, the Lottery Commission announced its suggestion that, seeing as how the lottery had performed over and above expectations, Arkansas’ college students should be awarded $5,000 scholarships if they plan to attend 4-year colleges and $2,500 if they attend 2-year colleges. There’s also been talk about giving additional scholarship money to students already enrolled in college.
At first, the news media couldn’t seem to decide if the $5,000 scholarship was $5,000 per year or $5,000 total. The latest I’ve heard says it’s going to be $5,000 per year—$20,000 over the course of 4 years—but I wouldn’t be surprised if that number changes before it’s all said and done. That’s because I just can’t seem to make all of the Lottery Commission’s math work.
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There Just Isn’t Enough Money for All of Arkansas’ Students
Arkansas’ lottery commission projects that $112 million will be available for scholarships. Additionally, there is another $20 million in tax dollars set aside by the Arkansas Legislature for Academic Challenge scholarships. So right now, the lottery commission says they are counting on Arkansas being able to hand out $120 million in scholarships to students. That sounds like a lot of money until you start looking at just how many students there are vying for scholarships.
According to the 2009 reports on the Department of Higher Education’s website, a little over 23,000 first-time students enrolled in Arkansas’ public colleges and universities in the fall of 2008; altogether there were 155,353 students—freshmen, seniors, and everyone else in between—enrolled in college that year. That’s a lot of students!
Now, when he touted the lottery in 2008, Lt. Governor Bill Halter practically promised every student—traditional and non-traditional alike—a lottery scholarship. Assuming on the high end that Arkansas does end up with a full $120 million from lottery and tax revenue to give away, that means that every student could have about $775 per school year ($120,000,000/155,000 students). I’m sorry, but at a lot of universities, that will barely cover your textbooks.
So you would think that the legislators checking the lottery’s math would revamp their expectations about awarding $5,000 and $2,500 scholarships to every student in Arkansas. They aren’t. Rep. Barry Hyde was quoted in the Arkansas Democrat Gazette yesterday as saying that the 20,000+ students enrolling in college next school year will be able to receive lottery scholarships if they meet the eligibility requirements (a minimum 2.5 GPA and a 19 on the ACT).
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How It All Really Breaks Down
Here’s the bottom line: We don’t know how many $5,000 or $2,500 scholarships they plan to hand out, but if they plan to give every student enrolling in college next year one type of scholarship or the other, the State of Arkansas will need $57,500,000 – $115,000,000 for the 2010-2011 school year. But what about the next year? They’ll have to be prepared to re-award those same scholarships to all of the returning students plus another 23,000 scholarships for new students.
Here’s a rough four-year breakdown (assuming Arkansas continues to enroll about 23,000 new students in college each year):
- For the 2010-2011 school year, Arkansas will need $57.5 – $115 million available in lottery money for scholarships
- For the 2011-2012 school year, Arkansas will need $115 – $230 million available in lottery money for scholarships
- For the 2012-2013 school year, Arkansas will need $172.5 – $345 million available in lottery money for scholarships
- For the 2013-2014 school year, Arkansas will need $230 – $460 million available in lottery money for scholarships
Those final numbers are virtually unattainable. The Arkansas Lottery would have to sell millions of dollars worth of tickets every day in order to take in enough money to give every Arkansas student a lottery scholarship. It just isn’t going to happen.
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They’re All Doing Funny Math, and Here it is
Here’s how ridiculous the lottery proponents’ math really is:
- When he first proposed the lottery to the Arkansas Legislature in 2007, Lt. Gov. Bill Halter told lawmakers it would generate $200 million per year for college scholarships; when the legislature rejected his idea, Halter took it to a vote of the people with a promise of $100 million per year in scholarships. He never justified either projection, and we still don’t know why he decided to cut his figures in half.
- An independent government agency reported during that time that Halter’s number was inflated, and that the lottery would probably bring in more like $40-$60 million for scholarships per year.
- Ernie Passailaigue, executive director of the Arkansas Lottery Commission, says he believes we can count on the lottery’s net proceeds for scholarships to increase each year—even though virtually every state in America that has state-run lotteries saw their lottery revenue decline within the first 4 or 5 years.
- Rep. Barry Hyde says we can give scholarships to all 20,000+ students enrolling in college next year if they meet the eligibility requirements (and almost all of them will because the eligibility requirements are so low); it doesn’t seem he’s considered the fact that Arkansas will have 23,000 more students enrolling the next year, and 23,000 more the year after that. There’s just no way the money can last!
Everyone is throwing out different numbers, different statistics, and different projections, but somehow they all think it’ going to lead to every student in Arkansas getting a lottery scholarship. I’m sorry, but math just doesn’t work like that.
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Here’s the Bottom Line
They promised scholarship money to every student in Arkansas. Now they’re trying to keep that promise, but the simple fact is that for the scholarship money to continue to flow after next year, they will have to deny scholarships to some students. Truth be told, they will have to deny scholarships to a lot of students.
When it comes right down to it, I believe the lottery’s promises of scholarship money may be just as empty as its promises of wealth and prizes to its players.
