Week in Review

State Capitol Week in Review
March 13, 2009
LITTLE ROCK – The scholarship program financed by the new state lottery has been written into legislation and is scheduled for public hearings.
Creating a new state lottery is one of the most important issues for legislators this session. Lawmakers have been working on setting up the operation of the lottery and setting eligibility criteria for the college scholarships it will provide.
Their work is now in Senate Bill 26, which is in the Senate Committee on State Agencies and Governmental Affairs. An identical version is in House Bill 1002, which is in the House Rules Committee.
According to legislative leaders, lottery tickets should go on sale around the end of this year and scholarships will be available for college students in the fall of 2010. Scholarship amounts will depend on how much revenue the lottery produces.
If sales of lottery tickets are brisk, scholarships would be $6,000 a year for students at four-year universities and $3,000 for students at two-year colleges. Those would be the maximum amounts and would be available if the lottery generated about $126 million or more.
If sales of lottery tickets are slow, scholarships would be $2,500 for students at four-year institutions and $1,250 for those at two-year colleges. Those are the minimum amounts in the sliding scale, and would be in effect if the lottery brought in about $60 million or less in a year. Estimates vary widely as to how much the lottery will generate in Arkansas.
The lottery bills greatly expand a popular scholarship program already in existence, the Academic Challenge Scholarship Program. They include has provisions for non-traditional students, nursing students and part-time students.
To be eligible, a graduating high school student must take the Smart Core curriculum and earn a grade point average of 2.5. If their grade point average is below 2.5 they can qualify if they score a 19 on the ACT standardized test. In districts in which grade inflation is recorded, students must score a 19 on the ACT. If they do not complete the Smart Core curriculum they must score a 19 on the ACT. Once in college they must maintain a 2.5 grade point average.
The bill creates a Lottery Commission and a legislative oversight committee.
Tax Cuts
SB 875 would lower the state sales tax on energy used by manufacturers by three-fourths of a percent. The savings for Arkansas industries could total more than $9 million, depending on how many take advantage.
SB 88 to reduce the sales tax on groceries by a penny, which was passed by the Senate, has improved chances of passage in the House. The bill has been amended to add enough House co-sponsors to guarantee its passage.
Economic Development
The Joint Budget Committee endorsed SB 438, a major economic development measure. It includes $50 million for the Quick Action Closing Fund, which state officials need to negotiate incentives with industries interested in locating in Arkansas.
The bill includes $20 million appropriation for infrastructure projects and another $5 million for job training.