Three years ago, when it seemed Georgia's HOPE scholarship was headed to a shortfall, leaders there capped the number of hours they would fund and provided stiffer requirements for getting the scholarship.
A year ago, Tennessee made it easier to get a HOPE scholarship, and now the program is sitting on the edge of a $10 million shortfall, officials report.
For the first time in the Tennessee lottery's five-year existence, spending on HOPE scholarships and the state's pre-K program outpaced lottery profits.
"This is really a unique situation. All this time, the lottery has been running in a posture where it grew in profits every year," said state Sen. Andy Berke, D-Chattanooga.
But it's nothing new for Georgia, where the education lottery has been paying students' college education since 1993.
"Three or four years ago, we had to address some of the problems with the requirements .. and eliminate some of the gaming of the system," said State Sen. Jack Hill, R-Reidsville, Ga., who was chairman of the state's higher education committee and now is chairman of the budget-writing appropriations committee.
For the lottery's 16-year history, Sen. Hill listed more than half a dozen tweaks that made HOPE scholarships harder to obtain and keep. Some fixes, such as capping the number of college credit hours for which HOPE would pay, eliminated students from getting multiple degrees off one HOPE scholarship.
Other changes made uniform the statewide GPA required to get and keep the scholarship.
"We have had all sorts of efforts to streamline it, to be sure we are focusing on (a), truly eligible students, and (b), those who are truly staying eligible," Sen. Hill said.
LOTTERY SLOW DOWN
Tennessee lottery officials are blaming their earnings slowdown on two things.
"The economy is an obvious reason. Another is the lack of a $250 (million) to $300 million Powerball jackpot," said Jim Hill, chairman of the board of the Tennessee Education Lottery.
Kym Gerlock, the Tennessee lottery's spokeswoman, agreed that smaller Powerball winnings are the cause.
"We attribute this to a slowdown in Powerball sales due to a fiscal year whereby we have not experienced a $300 million-plus Powerball jackpot," she said.
Georgia doesn't participate in Powerball. Its big game is MegaMillions, and jackpots for that game did reach the $200-million range in March. MegaMillions is played in 12 states. Powerball is played in 30 states, Washington, D.C., and the U.S. Virgin Islands.
High gas prices last year also forced many to stay away from convenience stores, which hurt sales, lottery officials said.
Georgia's overall sales are up about $136 million compared to this time last year, records show.
In January, Tennessee lottery sales were down about 2 percent. Over the first three quarters of this fiscal year, the lottery sent about $197 million to the state to fund education, but the state paid out $228 million in scholarships, records show.
Tennessee finance officials plan to dip into lottery reserve funds to the tune of about $10 million just to pay for the HOPE scholarships already promised for this year.
In his budget proposal this year, Gov. Phil Bredesen proposed moving $22 million in funding from the lottery due to shortfalls and making it a recurring, or ongoing, appropriation from the general fund. Senate Republicans last week made it a one-time appropriation from the general fund.
Legislators could act, as Georgia has, to make it harder to get a scholarship, but legislators said they'd prefer to wait and see if the lottery again grows its profits next year before making changes.
"We really have to give it some time," Sen. Berke said.
The profits downgrade comes a year after the legislature made it easier than ever to continue to receive a HOPE scholarship in Tennessee. Legislators voted last year to lower the GPA required to keep the scholarship once attending.
Tennessee students now must have a 2.75 GPA after 48 semester credit hours and a cumulative 3.0 GPA in subsequent years to keep their HOPE scholarships. Before, students had to keep a 3.0 all four years, which caused many students to lose the funding quickly.
Georgia students must have a "B" average to obtain a scholarship when graduating high school. All HOPE Scholarship recipients must have a grade point average of at least a 3.0 at the end of every spring term in order to continue their eligibility.