Democrats yielding on plan to save program

Kirsten Searer

Wednesday, May 18, 2005 | 10:49 a.m.

CARSON CITY -- Assembly Democrats yielded on a plan Tuesday that would have directed $100 million to save the cash-strapped Millennium Scholarship.

Instead, they propose a solution similar to one generated by Gov. Kenny Guinn and legislative leaders in February. The new plan would put $35 million in one-shot money into the program and direct another $7.6 million a year from state unclaimed property funds.

Staff members project the plan will carry the scholarship through 2013.

Assemblywoman Chris Giunchigliani, D-Las Vegas, who first touted the $100 million idea, said she would have liked to endow the scholarship with the chunk of money so the state would not have to use general fund money to support the scholarship program in future years. But, she said, the $600 million state surplus is smaller than some hoped.

"There's just not enough left in the surplus with having to do the rebate," said Giunchigliani, the vice chairwoman of the Assembly Ways and Means Committee. Giunchigliani once said she opposed the rebate but has since relented.

The Millennium Scholarship has proved more popular than originally projected, but has seen decreases in revenues from the tobacco settlement, which largely funds the scholarship. It was expected to be $73 million in the hole by 2010.

Guinn told legislators at the beginning of the session that saving the scholarship -- which many consider to be one of his legacies -- would be one of his top priorities.

In February, he proposed putting $32 million into the program and then following that with $8 million a year from unclaimed property funds. He projected the changes would make the scholarship solvent through 2020.

The key difference between the new plan proposed by the Assembly and Guinn's plan is whether to limit the number of credits students take each semester, whether the scholarship should cover summer school and who should supervise the scholarship.

Guinn's plan, which was endorsed by key legislative leaders, wouldn't have allowed students to take summer school classes with Millennium funds. They also would have been limited to no more than 12 credits per semester in university settings, and 9 credits per semester in community colleges.

State Treasurer Brian Krolicki said the cuts would have saved the scholarship fund $10 million a year.

"I still think the Millennium Scholarship needs to be made leaner," he said Tuesday. "It needs to go on a diet."

But Giunchigliani and Ways and Means Chairman Morse Arberry Jr., D-Las Vegas, argued that students were limited to $10,000 in Millennium funds -- $2,500 per school year -- so it didn't matter whether they wanted to accelerate their education with additional courses. The Legislature has made a commitment to students to fund their education at a certain level, Arberry said.

"If we start telling them they can't do certain things, it's not fair to them," Arberry said.

Krolicki also wanted to remove scholarship money after students fell below the minimum grade point average for one semester. Democrats want to give students a two-strikes-you're-out policy. Students must maintain at least a 2.6 grade point average to maintain the scholarship.

The two plans agree one one thing: Students would no longer be able to use the funds for remediation classes. Assembly Bill 560 would also strip the treasurer's office of its administrative powers over the Millennium Scholarship, instead putting it under the Department of Administration.

The Board of Regents would have additional power over the scholarship, while the treasurer would simply invest the Millennium funds.

Guinn spokesman Greg Bortolin said Guinn worked with Democrats on the new plan and likes the idea of simplifying the restrictions and moving the scholarship to the Department of Administration.

The bill is still before the Assembly Ways and Means Committee.