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2011 April 18 - 12:00 am

MONEY TREE: Ark. Senate, House Split on Scholarship Amounts

LITTLE ROCK, Ark. (AP) — Arkansas lawmakers have split over whether they or the state Higher Education Department should set the amounts for lottery-funded scholarships, a disagreement that could determine whether current scholarship recipients are awarded the same amounts next fall.

The House approved legislation that would set next year’s lottery-funded scholarships at $4,500 for university students and $2,250 for students at two-year schools. The bill, which passed 75-7, would keep last year’s scholarship amounts intact for that class of students — $5,000 and $2,500, respectively.

Meanwhile, a Senate panel advanced legislation that would require the state Department of Higher Education to calculate the scholarship amounts using a formula based on the lottery’s proceeds and the expected number of eligible students. The proposal by Sen. Johnny Key, co-chairman of the lottery’s legislative oversight committee, would not guarantee the current amount for students already receiving the scholarships.

“One of the difficulties we’ve run into is sometimes the difficulty in getting all the right information because of timing from the universities through Higher Ed to us, or because of information that’s restricted because of federal law,” Key said. “Since they have it all, they are best equipped to use that data, run it through the formula and give us that scholarship amount.”

Key said that, under that formula, the scholarships would likely decrease to $4,600 for four-year schools and $2,300 for two-year schools.

The Senate State Agencies and Governmental Affairs Committee advanced Key’s proposal after initially rejecting it. Key later got six of the panels’ eight members to sign a written vote recommending it head to the Senate floor.

The move would be a shift for the Legislature, which gave itself the authority to set the lottery scholarship amounts in 2009. Voters approved the lottery to raise money for college scholarships in 2008, and the state began selling tickets the following year. The first scholarships were awarded last year.

A spokesman for Gov. Mike Beebe said he wouldn’t support Key’s proposal because it didn’t guarantee the amounts that students are currently receiving. Beebe spokesman Matt DeCample noted that the state has struggled to get more students in college because of the cost.

“If you’re tearing down those scholarships while they’re already in that system, you’re increasing that risk,” DeCample said.

The competing proposal backed by the House follows the recommendation of the oversight committee chaired by Key and Rep. Mark Perry.

Perry, chairman of the Lottery Oversight Committee, put forward the bill that would set next year’s lottery-funded scholarships at $4,500 for university students and $2,250 for community college students.

No mention was made of the different bill that emerged from the Senate committee.

The House bill passed 75-7, even as legislators took shots at lottery director Ernie Passailaigue.

“I hope we reduce (Passailaigue’s) salary like the scholarships,” said Rep. Justin Harris, R-West Fork.

Passailaigue earns $330,480 per year, the second highest pay among state lottery directors when he was hired two years ago. Passailaigue’s salary and that of his top deputies have come under repeated criticism from legislators.

Rep. Johnnie Roebuck commented that Passailaigue’s bookkeeping “wouldn’t have won an award” when she introduced a bill that stipulates what information must be included in the lottery’s annual financial report. The bill passed 88-0.

The Senate panel also advanced legislation that would bar the state from selling lottery tickets via vending machine.

Sen. Sue Madison, who proposed the ban, said she was worried vending machine sales would open up the possibility of minors gambling. The lottery has eight machines deployed around the state, with 100 total available for retailers.

Passailaigue told the committee the machines require a driver’s license to verify the user’s age and must be located where a retail employee can see the transactions. The ban now heads to the full Senate for a vote.

The proposal passed on a voice vote, even though only four of the eight committee members were there and it needed five votes to advance. Sen. Kim Hendren, who chaired the meeting, told reporters after the meeting he probably should not have allowed it out of committee.

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