Thursday, Jan. 13, 2005 | 9:10 a.m.
CARSON CITY -- Gov. Kenny Guinn's Millennium Scholarship program to help Nevada students get through college has been so successful that it could be $16 million in the hole next year.
State Treasurer Brian Krolicki told the Legislative Interim Finance Committee Wednesday that it was originally predicted that 50 percent of eligible Nevada high school seniors would use the $10,000 scholarship program, which is financed from tobacco rebate funds. Instead, 74 percent of the eligible students have signed up.
If the program is not tightened, it will be $73 million in the red by the year 2010, Krolicki said.
Guinn proposed the program in 1999 and the Legislature agreed. At that time the state was expected to gain about $44 million a year from the tobacco settlement with four cigarette manufacturers.
Since then, smoking has decreased amid health concerns, and Krolicki said he is expecting a $38 million payment in the next couple of months, a substantial decline.
About 22,000 students have qualified for the scholarship so far, compared with 13,000 Millennium scholars in the spring semester last year, Krolicki said.
Krolicki said some of the potential changes that could be made by the Legislature include stopping the payment of scholarship funds for summer school and refusing to reinstate the scholarship if the student drops out of school and then returns.
He called that option the "one strike and you're out" plan. But Assemblyman Morse Arberry, D-Las Vegas, chairman of the Finance Committee, said a student has to leave school sometimes for such things as a death in the family.
"I would hate to see them lose their scholarships," he said.
Sen. Barbara Cegavske, R-Las Vegas, said one change could be that a recipient would have to spend four years in a Nevada high school. And if the student drops out of college after earning the scholarship, he or she would have to pay the money back. At present, she said there are no consequences for dropping out of the scholarship program.
Sen. Bob Beers, R-Las Vegas, said the grade point average in high school might have to be raised to 3.5 to qualify for the scholarship. The 2003 Legislature raised the grade point average to 3.1 for those graduating this year and in 2006 and to 3.25 for those graduating in 2007 and after that.
Assemblywoman Chris Giunchigliani, D-Las Vegas, suggested the program might be changed to have an income test to qualify. She said the scholarships should go to the students who are most in need financially. she said some students get other scholarships in addition to the Millennium Scholarship.
Payments range from $40 per credit for community college to $80 for a credit at UNLV or UNR.
Krolicki also suggested using some unclaimed property money to help finance the scholarships. He said $100 million in bonds could be issued and the annual unclaimed money that reverts to the state could be used to pay the bond premiums.
Former Assemblyman David Goldwater of Las Vegas, who continues to sit on the committee until the Legislature convenes Feb. 7, said there should be a notice to students and parents that the program could be changed or curtailed.
Krolicki said such a disclosure statement is on the application.
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