Senate OKs boosting lottery payout for HOPE

HOPE, pre-k programs would benefit from bill.

The Georgia Senate voted unanimously Tuesday to force the Georgia Lottery to put more money into the state’s popular HOPE scholarship and pre-k programs.

Senate Bill 5 would require the lottery to transfer a specific percentage of its revenue to the state every year for those education initiatives: 26.5 percent in fiscal 2018, 27.5 in fiscal 2019 and 28.5 percent every year after.

The bill’s sponsor, Senate Majority Leader Bill Cowsert, R-Athens, has long been critical of the lottery’s administrative costs, saying cuts could raise more money for programs that can’t keep up with the demand for them.

State law encourages the lottery to return about 35 percent of ticket sales to the education programs, although that is not a mandate and the lottery’s current return rate is about 25.5 percent.

“We have the envy of the country in our pre-k programs and our college HOPE scholarship programs,” Cowsert said. The goal of the bill, he added, was to get funding for the programs “back up to the maximum possible.”

A state audit released earlier this year found that administration accounted for about 14 percent of its overall operating expenses; it was not the major driver for the lottery’s costs.

Instead, the audit found that expenses related to prizes — such as advertising and, especially, payouts to winners — are the primary driver of operating expenses, and that small changes in that area could have a significant impact on the lottery’s bottom line.

To address the concerns of lottery officials that the bill could hurt sales because of decreased prize money, something that would also reduce revenue for the programs, the bill stops mandated increases if net sales revenue of lottery tickets drops by 5 percent from the previous year. The lottery last year returned a record $1 billion for education in Georgia.

SB 5 is now headed to the House for consideration.