Promise depends on bets: ; Wise wants gambling revenue for scholarships

DAILY MAIL CAPITOL REPORTER

Democratic gubernatorial candidate Bob Wise's major promise foreconomic development in West Virginia depends on two big gambles. The first gamble is gambling money, which is how U.S. Rep. Wiseproposes funding the centerpiece of his economic development plan.He wants to legalize and tax "gray" video lottery machines to payfor millions of dollars in Promise Scholarships, for all high schoolstudents with a B average or better who attend a state college.

The second gamble, however, is that state lawmakers will go alongwith Wise's plan and finally tax the payouts from the machines, ifWise defeats Republican Cecil Underwood in November.

And even if they do, will they agree to Wise's plan for themoney?

Maybe not. One key lawmaker is already saying he'd rather see thegray machine revenue used for other projects.

"What I would like to do is sell him on an alternative," saysSenate Finance Chairman Oshel Craigo, D-Putnam.

Craigo's been a major player in getting gray machine legislationthrough the Senate the past two years, even though it's met arockier reception in the House of Delegates.

And Craigo says he has serious doubts about the PromiseScholarships, passed by the Legislature last year but still awaitingfunding. He notes that other states that have tried similarscholarship programs, like Georgia and Louisiana, have seen costsescalate much faster than anticipated.

According to Governing magazine, the annual tab for Georgia'sprogram has risen from $21.4 million to $189.2 million in the pastseven years. In Louisiana, a merit scholarship program initiallyprojected to cost $36.2 million ended up costing $62.5 million, themagazine reported.

Craigo says the best use of gambling revenue would be to fundinfrastructure needs and one-time capital projects - not an ongoingprogram. Because gambling revenue can fluctuate wildly, "lockingourselves into paying for these scholarships with gambling moneywould be a terrible idea, I think. We shouldn't do it," he says.

On paper, it seems like the scholarships could be easily affordedwith gambling revenue. The price tag for the scholarships has beenprojected at about $25 million, while most tax revenue projectionsfor the take from legalized gray machines range from $100 million toas much as $200 million.

Nobody's sure exactly how many gray machines - which are nowlegal to play, but not for payout - there are in the state. The bestguess so far is about 9,000.

But Wise spokesman Mike Plante notes that even if the cost ofPromise Scholarships doubles from the original estimate, thereshould still be more than enough gray machine revenue to pay thebills.

And Plante says the need justifies the expense.

"One of the things you see in states that are successful is thattheir college graduation rates are much higher than ours," Plantesays. "To make that education available to our high school studentscarries a cost. But it's a compelling need."

Craigo, however, says infrastructure projects are also a criticalpart of economic development.

When the Senate passed a bill this year legalizing the payoutfrom gray machines, it carried a proposal drafted by Craigo for howto spend the money. Most would have gone for a variety ofinfrastructure projects, as well as grants to local communities fortheir own infrastructure needs.

Even though the gray machine bill died in the House, Craigo sayshe'd probably make a similar proposal again next year.

If the state is going to use gray machine revenue to helpstudents pay for college, Craigo says, it should fund low-interestloans instead of grants. Those loans could be forgiven if studentsstay in West Virginia for a certain number of years after theygraduate, he says.

"The documentation suggests we're basically educating people toleave the state," Craigo says.

"This would encourage people to stick around. They do it formedical school."

Or, Craigo suggests, the state could use the money to fund thefirst year of college for all high school students and "give all ourpeople a chance."

The state already has one scholarship program - the HigherEducation Grant Program, which pays 75 percent of the tuition, fees,books and lodging for students who qualify.

Although the program is primarily need-based, says David Ice,Secretary of Education and the Arts, it does require some proof ofhigh school success. Students have to maintain a "C" average, Icesays.

That figure is averaged with a student's score on the ACT to helpdetermine eligibility within the overall pool of students. Then,students with the greatest financial need are served first.

Gov. Cecil Underwood requested full funding of the HigherEducation Grant Program this year but didn't receive it. But Icesaid the governor will likely continue to push for full funding ifre-elected in November.

While Ice says it would be nice to have both Higher EducationGrants and Promise Scholarships, "it just seems to make sense thatthe students with the greatest financial need are the state's firstobligation."

"Promise Scholarships are just one of those areas that aredifficult to justify, given the state's financial limitations," hesays.

Some critics of grade-based, Promise Scholarship-type programshave charged that in states that have adopted them, the programshave sucked up money for need-based scholarship programs.

Underwood campaign spokesman Rod Blackstone says it's not fairfor the state to fund college educations for students who couldprobably pay for them without help.

"It's curious that Bob Wise, who has blasted any proposed tax cutin Congress, is pushing hard for a program that rewards thewealthiest families," Blackstone says. "That's inconsistent."

Plante responds that something has to be done to get more statestudents into college. The state's college-going rate has improvedin the last few years but still ranks near the bottom nationally.

"I can't believe the governor would criticize a proposal thatwould help all hard-working West Virginia students," says Plante,who also blasts Underwood for not "expending political capital" toget the gray machine situation resolved.

Underwood has said he doesn't favor an expansion of gambling.

However, another criticism of Promise Scholarship-style programsis their rapid expansion in other states. Mountain Partygubernatorial candidate Denise Giardina, an author and collegeprofessor, says that could be due to the pressure teachers face tohelp their students qualify.

"What happens if I've got a kid who needs an 'A' on a test to geta 'B' average?" Giardina asks. "I just think it's a disaster waitingto happen."

Craigo agrees, saying he thinks the pressure leads teachers inother states to "end up teaching the test."

"Now what they find is that everybody's making a 'B'," he says."Does that mean everybody's suddenly gotten smarter? I doubt it."

Writer Dan LeRoy can be reached at 348-7917 or by e-mail atdjleroy@dailymail.com.