Higher ed lottery campaign OK’d by governor

OLYMPIA – A bill creating a new marketing campaign in July for state lottery games that wil fund university student financial aid was signed today by Gov. Christine Gregoire.

 

Gregoire signed Senate Bill 6409 about 10 days after the closure of the special session. Also known as the “Opportunity Pathways bill,” it was sponsored by Sen. Jim Kastama, D-Puyallup. Kastama is chair of the Senate Economic Development, Trade and Innovation Committee. He is vice chair of the Senate Higher Education and Workforce Development Committee. His bill was discussed throughout the 89 days of the regular and special sessions of the 2010 Legislature and was one of the very last to pass.

 

Christopher Liu, director of the state lottery, said he had made comparisons with other states that market for higher education. Based on those comparisons, it is realistic to estimate that the Washington State Lottery could eventually generate $300 million to $400 million in more funding, he said. Short term, the Legislature is counting on $15 million in growth from a higher education-themed lottery next year as part of the revenue and tax package that was also signed today.

 

The Opportunity Pathways Bill, coupled with a supplemental operating budget that the governor is expected to sign in early May, shifts the beneficiaries of the state lottery entirely away from K-12 education and into college student financial aid and early childhood education. Lottery officials are already planning summer marketing campaigns beginning July 1 that will focus on benefitting the college “state need grant” program and perhaps feature students in graduation caps and gowns.

 

All in-state games operated by Washington will now benefit higher education, including the share of the multi-state “Mega Millions” and “Power Ball” lotteries. The action means that persons that purchase Lotto, Scratch and other state lottery games beginning July 1 will be helping to fund college student financial aid, most notably the “state need grant” program.

 

More than 4,900 WSU students this year received a total of $27 million from the state need grant program. State Need Grant is funded by a variety of state sources. Under the provisions of the bill and the revised budget, about one-third of the funding for the $228 million statewide need grant program will now be provided by state lottery revenues, according to John Klacik of the state Higher Education Coordinating Board. Other state financial aid programs that will receive lottery funds in future years include state work study, which currently benefits more than 800 WSU students, and “Washington Scholars.” The Education Opportunity Grant, a program that benefits 330 students that transfer from community colleges, was among financial aid programs eliminated for next year by the Legislature. However, the EOG could receive funding in future years from the lottery.

 

Research efforts

Future Legislatures could also allocate funding for other university programs that Kastama worked to retain in the bill including recruitment of university researchers, funding for innovation partnership zones, and other university economic development or research programs. Kastama sought to hold K-12 harmless from the shift, but hopes that growth in state lottery revenues will bring more funding, perhaps eventually hundreds of millions of new dollars for university financial aid.

 

The legislation was supported by Washington State University. Among those joining Kastama for today’s bill signing at the state capitol building were Sam Shaddox, the student lobbyist for the Associated Students of Washington State University, Mike Bogatay, of the Washington Student Association, Egils Milbergs, director of the Washington Economic Development Commission, and lottery director Liu.

 

For the past ten years, the state lottery has largely benefitted K-12 education as state lotteries do in Florida and California. But unlike those states, Washington’s marketing campaign was never publicly pitched as a benefit to K-12. Public school administrators and unions said that an aggressive K-12 lottery campaign could jeopardize local school levies and bond issues. Voters might believe the lottery funds would be sufficient without levy approval, they argued. Others have questioned linking a gambling message to children’s education.

 

Lottery officials point to a new Arkansas state lottery for higher education that has made that state one of the most successful lotteries in the nation … and after only a single year of operation.

 

Kastama said he is inspired by states like Georgia, which originally used the lottery to create a popular “Hope” scholarship program. North Carolina, Kentucky and New Mexico are successful state lotteries that advertise benefits to student financial aid, lottery officials say.

 

The legislative budget shifts about $70 million of current university financial aid onto the state lottery books and about $40 million for early childhood education programs. Lottery officials said they have still not determined the feasibility of a marketing campaign that would include an emphasis on early learning.

 

The governor did make a partial veto of the bill that removed additional audits of the lottery commission. Kastama said he had no concerns about the partial veto because the lottery already is responsible for many reports to the Legislature.

 

The lottery bill brings some long-term hope to stabilize funding for student financial aid that was under attack in this year’s legislative session. Gregoire’s own no-tax budget released in December slashed state need grant funding. It would have left 1,400 WSU students without any need grant benefits and would have cut benefits in half for the remaining 3,300 WSU recipients. The final legislative budget was coupled with a tax package that hiked the rates on bottled water, candy, beer, tobacco and professional services. She signed that bill today which allowed the need grant to be reduced slightly with the difference to most students made up with the federal Pell Grant. However, there was a 30 percent cut in state work study funding, reductions in Washington Scholars and vocational education, and elimination of the Education Opportunity Grant, which impacts 330 WSU students.