Newly appointed state Treasurer Converse Chellis pledged in a recent interview that students who have been awarded $5,000 LIFE scholarships for college will receive all the money they were promised for the next four years. Nonetheless, the drop in available money for the scholarships illustrates the danger of relying too heavily on a state lottery for revenues.
South Carolina college freshmen receiving LIFE scholarships this fall are worried that the money could be reduced before they graduate if demand for the grants continues to grow and lottery revenues continue to shrink. Chellis, however, in an interview on ETV's "The Big Picture," said that would not happen.
"Absolutely, I can say that," he said. "We'll work at that. No matter what happens, they will get that scholarship money."
But we doubt he could make that pledge much beyond the next four years. Competition from the new North Carolina lottery and dwindling interest in the South Carolina lottery are causing a decline in profits. Lottery profits were $273 million in the year ending June 30, down from a peak of $320 million in 2005-2006.
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State lawmakers already are considering a cap on the scholarship program, which could reduce the amount individual students receive. Georgia, experiencing a drop in its lottery revenues, tightened requirements, which has cost 18,000 students their scholarships.
Thankfully, South Carolina resisted the temptation to commit lottery money to pay for operations at the state's colleges and universities. But the state has allowed college tuitions and fees to rise considerably over the past five years, and without scholarships, a college education would be unaffordable for many students.
The LIFE, Palmetto Fellow Hope and other tuition grants also were designed to entice South Carolina's most talented students to attend state schools. If the amount of the scholarships is reduced too severely, the state will lose that incentive.
State leaders have known from the start that the lottery was not a golden goose that would continue to produce high profits year in and year out. The experience of other states showed that profits would trail off over time.
State lottery officials now must come up with new gimmicks and come-ons to pique new interest in the lottery. Even if those efforts are successful, revenues may never rise to peak levels.
Meanwhile, state lawmakers need to do what is necessary to adequately fund higher education and find ways to alleviate the tuition burden on students and their families. The golden goose isn't dead, but it's ailing.
State can't depend on lottery to provide scholarships and reduce tuition burden on students.