Treasurer Brian Krolicki told the Interim Finance Committee on Wednesday the Millennium Scholarship program is using up tobacco money much faster than predicted and that it's up to lawmakers to fix it.
The program began in 2000, using tobacco settlement money to promise every Nevada high school graduate with a B average or better $10,000 in tuition to get a college degree.
But Krolicki said many more students than originally expected are using the scholarship money while fewer than predicted are dropping out. At the same time, his staff pointed out the cost of college has increased dramatically while the money Nevada receives from the tobacco settlement has dropped below what was originally expected.
The result, he said, is that the Millennium Scholarship program is burning through the available funds far faster than expected. The cost at this point was expected to be about $44 million but, Krolicki said, the actual cost to date has been more than $67 million.
He said it already ran a bit short this fall but the university system was able to cover the difference. He said it will be in the red next fall.
"The program cannot be sustained as currently constructed," he said.
The Millennium Scholarship was Gov. Kenny Guinn's signature program, pushed through the 1999 Legislature by himself and Krolicki who, at that time, said it could remain solvent for up to 20 years using tobacco settlement money.
Seeing the popularity of the program bite deeper into funding than expected two years ago, lawmakers approved a gradual increase in the grade point average needed to qualify. It steps up from 3.0 to 3.1 overall next fall and, in two more years, to 3.25.
Krolicki said that won't be enough. And he made it clear it's up to the Legislature to make the changes.
"This program is beyond tweaking," he said, estimating the program will need some $73 million more than the tobacco revenue will provide by 2010 unless changes are made.
He said further increases in GPA, toughening residency requirements so that only students who attended Nevada high schools for all four years qualify, barring students who lose the scholarship from requalifying by bringing their grades back up and other changes are all possibilities - as is finding additional revenue for the program.
"You have it within your authorization to do any of these things," he said.
Assemblywoman Chris Giunchigliani, D-Las Vegas, said maybe it's time to consider a means test so that good students from poor families qualify before those with wealthy parents.
And Sen. Barbara Cegavske, R-Las Vegas, suggested requiring those who "screw up" and lose the scholarship to pay back the money.
Krolicki said lawmakers will have to debate what to do this session to keep the program alive.
Contact reporter Geoff Dornan at nevadaappeal@sbcglobal.net or 687-8750.
