At 9 p.m. on April 15, with just three hours to go before the 2016 legislative session would adjourn for the year, Rep. James Kay, D-Versailles, grabbed a just-printed version of the state budget and noticed something very amiss.
Although House leaders had told Kay earlier in the session that the budget would not continue the legislature’s practice of diverting lottery proceeds meant for need-based student financial aid into the state’s General Fund, the bill called for diverting $40 million in lottery funds to pay for a new community college scholarship program and other initiatives.
He rushed to House Speaker Greg Stumbo’s office, where budget staff members were already working on a cleanup bill to fix the error. Yes, they assured him, it was a mistake, and they would correct it in House Bill 10.
Kay also texted a small group of high school students to notify them. The Prichard Committee’s Student Voice Team had urged lawmakers for months to fully fund the state’s two need-based scholarships, the College Access Program for low-income public college students and the Kentucky Tuition Grant program, for low-income students attending private schools. The students had bombarded legislators and policy leaders, urging them to fulfill what they dubbed the #PowerballPromise on social media.
The high school students spent Friday night huddled over their phones, waiting for updates. At 11 p.m., Kay texted Andrew Brennen, a member of the Student Voice Team. “They are putting the $40 million back,” Kay said. “Voting now.”
Brennen responded: “Speechless. Congratulations.”
“Man, it was as close as can be,” Kay texted back.
The House quickly voted to pass House Bill 10, then rushed it back to the Senate. Six minutes before the session ended at midnight, Senate President Robert Stivers signed the bill. Combined with another $15 million included in the budget, the programs have an additional $55 million over the next two years to help as many as 30,000 more students get desperately needed help to pay for college.
Jason Bailey, director of the Kentucky Center for Economic Policy, said the extra funding will be crucial in light of state cuts to higher education — 2 percent in the current year and 4.5 percent in the next biennium.
“Round after round of cuts since 2008 are leading to tuition hikes that are pricing students out of higher education and driving up student loan debt, and the scholarships will help mitigate that problem for many thousands of students,” Bailey said. “This budget restored the promise Kentucky made to students when creating the lottery, and is an important piece of what’s needed for better college affordability.
But the additional funding is not yet secure. Gov. Matt Bevin has until the end of Wednesday to veto individual items in the budget, allowing him to easily block part or all of House Bill 10 if he desires. Spokeswoman Jessica Ditto said Bevin is “carefully reviewing” the legislation.
In a January speech unveiling his budget plan, Bevin proclaimed an end to the practice of diverting lottery money away from need-based financial aid, although his budget plan called for putting $60 million of lottery money into new workforce development scholarships he had proposed.
Kay said he believes Bevin will leave things as they are.
“He (Bevin) claimed to keep all lottery money for education,” Kay said. “I think it’s something he didn’t completely understand and that he would like to do.”
Decade of diversion
Voters approved the Kentucky Lottery in 1989 on the understanding that 100 percent of the proceeds would go to education. But as early as 2006, lawmakers suspended that law and began diverting money to the General Fund to fill shortfalls as the economy started to falter. Since two-thirds of the General Fund supports education, legislators could say the money was still being spent on education. Between 2008 and 2016, they moved almost $200 million.
In addition, the General Assembly had taken millions more into the General Fund whenever lottery sales exceeded projections.
Legislators always fully funded the Kentucky Education Excellence Scholarships, a merit-based program given to every high school student with a GPA of 2.5 of higher. That aid often goes to those who need it the least. A study by the Kentucky Center for Economic Policy found that about 46 percent went to families who make more than $75,000 a year.
Meanwhile, tens of thousands of low-income students are turned away from the state’s need-based aid programs. In 2013, 86,000 qualified students were turned down after money ran out, according to the the Kentucky Higher Education Assistance Authority, which administers the programs.
Kay, who was elected to the House three years ago, decided to work on the issue. He sponsored a resolution to prohibit the diversion of lottery money. It passed the House Education Committee, but instead of going to the House floor for a vote, Rep. Rick Rand, D-Bedford, the House budget chief, and other House leaders assured him they would leave the money in place.
But House leaders also had other priorities, including a new scholarship program called “Work Ready,” to help more students pay for community college, and a program to help high school students pay for college classes. Together, those would end up in the budget with a price tag of about $40 million over two years.
At the same time, the Prichard Committee Student Voice Team had decided to make stopping the diversion of lottery money their next cause. The team had been active in Frankfort in 2015, trying to pass a bill that would allow students on superintendent search committees. That bill failed, but the students learned a lot about Frankfort. They dubbed this new issue the Powerball Promise, and took to social media to make their case, with some data analysis help from the Berea-based Kentucky Center for Economic Policy.
They promoted testimonials from students, such as Kevin Swiney, a senior at Betsy Layne High School in Floyd County, who said he dreamed of college but didn’t know how his family could pay for it.
“No one has really talked to me about how I’m going to afford college,” Swiney said at a March 3 rally at the Capitol Rotunda that was organized by the Student Voice Team. “We have a school counselor but no one has really talked to me personally about financial aid. It’s been one scary nightmare for me.”
Brennen, a Dunbar graduate who took a year off from the University of North Carolina to work with the Prichard group, said numerous students spent many hours meeting with legislators, planning rallies and tweeting about the #PowerballPromise.
“We are invigorated by the actions taken by the Kentucky General Assembly with respect to fulfilling the Powerball Promise,” Brennen said. “For the first time in over a decade, leaders have taken meaningful, bipartisan steps towards ending the appalling practice of diverting lottery revenue from their intended purpose: need-based college aid. … We thank and credit senators and representatives on both sides of the aisle who throughout the budget session have voiced audacious commitments to colleges accessibility.”
Kay and others give a great deal of credit to the Student Voice Team. Senate budget chair Chris McDaniel, R-Taylor Mill, said the team “certainly had impact.”
“Those students met with me and lots of others, and whenever you have someone talk to you on those issues, it helps,” he said.
Rachel Belin, the Prichard Committee staffer who helped create the Student Voice Team, said the legislative process, especially the last-minute budget fix, was “like out of a movie.”
But best of all, she said, it proves that students can take important stands to affect their own educations.
“Last year they were told they weren’t qualified to serve on superintendent screening committees, and this year, they effectively helped move $55 million to help low income students,” Belin said. “It begs the question if students are really not ready to serve more meaningful roles in making schools better?”