By J. Randolph Evans

Option 1: Do nothing until there is a complete crisis requiring
Draconian measures that include either scrapping the program altogether
or dramatically raising taxes only to delay the next crisis. Of course,
this could easily describe Social Security in the United States. (The
actual name of the program is the Old-Age, Survivors, and Disability
Insurance [OASDI program]).

Interestingly, the U. S. Social Security program is the largest single
government entitlement program in the world based on money spent. Not
surprisingly, it is also the largest expenditure in the federal budget.
Unfortunately, by 2041, the program will simply be out of money.

For decades, politicians and policy makers have warned of the future of
Social Security. Yet, because tough problems require hard decisions,
elected officials have continuously opted for Option 1 – do nothing, and
complain.

This is similar to the predicament Governor Nathan Deal, Lieutenant
Governor Casey Cagle, and Speaker David Ralston faced with the popular
HOPE program, except with a much shorter fuse. Increasingly, it became
clear that decreases in lottery revenues combined with severe budget
constraints put HOPE at real risk as it began to spend its reserves to
make payments.

Like Social Security, HOPE had become an untouchable program. While
everybody now knows HOPE, it has only been in existence for less than 20
years.

Georgians passed an amendment to Georgia’s constitution to permit a
lottery to fund HOPE on November 3, 1992. Within a decade, more than
600,000 students received more than $1.5 billion under the HOPE program.
These numbers have grown steadily since then.

As the 2011 Georgia General Assembly convened, Governor Deal, Speaker
Ralston, and Lieutenant Governor Cagle were faced with making some tough
choices including figuring out how to address a $300 million shortfall
in the HOPE program. Of course, one of the choices that they could have
made was to select Option 1 – do nothing but spend the reserves and let
the program move rapidly toward collapse. Bucking the federal approach
(and the approach of many other states) to handling such entitlement
programs, Georgia’s elected officials rejected Option 1.

Option 2: Reform a popular entitlement program to maximize its chances
for success and accomplish its reason for being without raising taxes.
Contrary to the belief of many, Georgia’s HOPE scholarship was not
created as a way to help underprivileged students pay for a college
education. Indeed, HOPE actually stands for Helping Outstanding Pupils
Educationally. It was the brainchild of Governor Zell Miller, who
wanted a program to keep Georgia’s best and brightest students from
leaving Georgia to attend college elsewhere.

As a result, as a merits based program, HOPE was focused on enticing
Georgia’s best and brightest students to attend a Georgia university or
college with the help of a scholarship based on their academic
performance, not their family’s financial situation. Governor Miller
believed that Georgia could have an even brighter future if Georgia
could just keep its best students here. Hence the stated goals of HOPE
specifically targeted “academically superior students.”

As HOPE faced increasing revenue challenges, there were many who saw it
as an opportunity to fundamentally change the program from a “merits
based” scholarship to a “needs based” program. Of course, “merits” and
“needs” are very different criteria.

A typical government response is to go with “all of the above,” i.e.,
just expand the government program to do both – provide scholarships for
the needy, and provide scholarships for the academically successful. To
pay for such expansions, taxpayers end up footing the bill with higher
taxes since there is not enough money to do either one completely, much
less both.

Instead, Georgia’s leaders opted for reform – a word considered almost
taboo when talking about entitlement programs. Basically, the changes
aim at saving HOPE with an emphasis on fulfilling its stated goals. The
top ten percent of Georgia students (a 3.7 GPA coupled with a 1200 SAT
or 26 ACT score) will continue to receive a full tuition scholarship at
state universities and colleges or a $4,000 allowance at private
universities and colleges in Georgia.

For everyone else, it is not “all or nothing” like a crash of the
program would have produced. Instead, students with a 3.0 GPA will
still receive a scholarship for 90% of the standard state tuition.
Other changes include minor modifications to the Pre-K part of HOPE.
Now HOPE endures.

The simple message for Georgia students who want a HOPE scholarship
remains the same – study hard, work hard, do well and stay in Georgia.
Do those things, and Georgia will help in a big way.