Published: September 03, 2008 11:05 pm            

Gov candidate eyes private funds for 21st Century program

TERRE HAUTE — Democratic gubernatorial candidate Jill Long Thompson wants to increase access to higher education by expanding the 21st Century Scholars program through private fundraising.

“We’re not going to privatize our state lottery to do this,” said Dennie Oxley, Democratic nominee for lieutenant governor, in a visit to Terre Haute on Wednesday. He was referring to a proposal announced by Gov. Mitch Daniels last month.

Oxley’s visit coincided with the rollout of the Long Thompson-Oxley plan to “strengthen the economy by reforming education.”

One of the proposals in the plan is to expand the 21st Century Scholars program, created by the Evan Bayh administration in the 1990s.

The program provides tuition for lower-income students who maintain a certain grade-point average in high school and pledge to abstain from alcohol and drugs.

Because scholars are required to seek all available state and federal financial assistance, the final cost of the program is only about $2,500 per student annually, on average.

Long Thompson wants to expand the program to include a larger percentage of lower and middle-income families.

She also would introduce requirements for Scholars to volunteer in their communities to foster civic involvement, according to an outline of her plan.

Long Thompson and Oxley propose creation of a higher education foundation “to tap billions of dollars available in philanthropic aid” to expand the program, according to their plan.

Expansion would be limited by the amount of money that could be raised, Oxley said Wednesday. “Our businesses and communities support our schools. We’re going to use that on a statewide basis to get more kids in college and to fund more children going to college,” he said.

Students begin signing up for 21st Century Scholars when they are in middle school, “So we’ll have about six years to raise money and get this thing really going in the right direction,” Oxley said.

Long Thompson and Oxley want to expand the program to students from families making no more than 250 percent of the federal poverty level — or about $53,000 a year or less for a family of four. Currently the scholarships are available to students from families earning 185 percent of the poverty level, or $39,220 for a family of four.

The increase could cost an estimated $15 million.

Last month, Daniels unveiled his own proposal called the Hoosier College Promise, which would be available to high-school graduates whose families earn about $60,000 or less annually.

Qualifying students would receive two years of free tuition at Ivy Tech Community College or an equivalent amount of $6,000 in need-based aid to use for their first two years at other colleges or universities in Indiana.

He proposed two possible financing options that would involve the Hoosier Lottery.

One option would be to privatize the lottery and auction the rights to manage it for 30 years through a lease agreement. Daniels suggested that the private contractor would provide an upfront payment of $1 billion or more, which would be put into a trust for the program. The company also would have to pay the state an annual royalty of $200 million to support current uses of lottery funds.

The second option involves the state issuing $1 billion in bonds, with proceeds put in a trust to fund the program. The 30-year bonds would be repaid through future growth in lottery revenue.

Daniels’ proposal, which would require legislative approval, provides “a dedicated way to pay for it,” said Cam Savage, communications director for Daniels’ campaign. It was estimated the plan would cost about $50 million annually, once fully implemented. About 24,000 new high-school graduates (incoming freshmen) would be expected to receive a Hoosier College Promise award each year.

Jason Tomcsi, Long Thompson’s press secretary, said Daniels’ proposal “is a good sound bite … but we don’t think it’s a plan that’s feasible.”

Asking a company to pay $1 billion upfront — and an additional $200 million per year — would call for a significant expansion of gaming in the state, Tomcsi said.

He also noted that Indiana voters approved the Hoosier Lottery through a referendum, and what they agreed to was a state-run lottery.

“Now, the governor is proposing farming it out to someone else and changing what Hoosier voters approved,” Tomcsi said.

The Associated Press contributed to this report

Sue Loughlin can be reached at (812) 231-4235 or sue.loughlin@tribstar.com.

        

• Click to discuss this story with other readers on our forums.