State Capitol Week in Review
From Senator Larry Teague
June 30, 2017
LITTLE ROCK –The Arkansas lottery is on track to raising more than $80 million for college scholarships in Fiscal Year 2017.
When this year’s total amounts are counted, they may not quite equal the amount generated last year. Last year’s sales were enhanced by a tremendously high Powerball jackpot that generated a lot of publicity and public interest in January of 2016. Winners in three states shared about $1.6 billion, and Arkansas lottery ticket sales in January of 2016 set a one-month record of $58.7 million.
Lottery scholarships were awarded to 35,207 college and university students last year. That number includes traditional and non-traditional students, such as older students who return to college after a few years in the work force. Since the lottery began in 2009, almost $700 million has been generated for scholarships.
Lottery tickets are sold at 1,930 retail stores and they will receive about $25 million in commissions this year. The director of the lottery told legislators that the lottery would have met its budget this year if more retailers had signed up to sell tickets.
Arkansas approved a state lottery in the 2008, with 648,122 people voting for it and 383,467 voters against it.
State government adds to lottery scholarship fund with $20 million a year in state tax revenue. The Arkansas Academic Challenge Scholarships spent $100 million in Fiscal Year 2015 and $96.5 million in Fiscal Year 2017. This year the program is on pace to spend $85 million.
The initial interest caused by the creation of the lottery has waned. In order to stabilize revenue and perhaps increase ticket sales to prior levels, lottery officials have contracted with marketing firms to promote ticket sales.
Also, several times over the years the legislature has changed the scholarship amounts that students receive. The changes were necessary so that students’ families would be able to budget for the cost of college over the long term. When high school graduates earn scholarships, their families should know how much it will be worth over the course of the students’ college career, whether they are in a two-year college or a four-year university.
Act 1105 of 2015 is the most recent legislative change in scholarship amounts. Scholarship recipients at four-year universities receive $1,000 dollars in their freshman year and $4,000 their sophomore year. If they maintain a grade point average of 2.5, they get $4,000 dollars their junior year and $5,000 dollars their senior year.
Recipients who attend two-year colleges receive $1,000 dollars their first year and $3,000 dollars their second year.
The amounts are structured so that students have a strong financial incentive to stay in school and do well. It is a goal of legislators, educators and business leaders to encourage more Arkansas students to earn a degree. An educated work force is more attractive to corporate executives looking to locate or expand, especially in industries that demand high-tech skills.
Students also have to complete a minimum number of courses in order to continue being eligible during their college years. As of last year, high school graduates applying for the first time must score at least 19 on the ACT college entrance exam.