CARSON CITY — The Millennium Scholarship program that offers $10,000 state college scholarships to bright Nevada high school graduates will fall $1.3 million short of its need next year and possibly more in subsequent years, a state treasurer’s official confirmed Tuesday.
Steve George, chief of staff for the treasurer’s office, said money Nevada receives from a national settlement with the tobacco industry has fallen below expectations. Forty percent of the money the state receives from that settlement goes into the scholarship program.
The decline has put the program’s solvency in jeopardy and forced the treasurer’s office to transfer other funds to the program, he said.
George, who responded to questions addressed to state Treasurer Kate Marshall, acknowledged the shortfall after former state Controller Steve Martin said the program faces insolvency. Martin is a Republican candidate for treasurer. He calculated the program is $1.6 million short of its need.
The state previously used money from the treasurer’s unclaimed property fund to cover some costs of the scholarship program, but the Legislature during the February special session took $7.6 million of those funds to cover part of the state’s $800 million-plus revenue shortfall.
"The Legislature will have to make a decision on whether to keep the program going forward," George said. "They have some tough decisions ahead."
Under the program, about $30 million a year is given out in scholarships.
Martin blamed poor decision-making by Marshall, a Democrat who is seeking re-election, for the scholarship hole.
"Why hasn’t the treasurer’s office brought this to the front?" Martin asked.
Martin said Marshall repeatedly told legislators that there would be enough funds to keep the Millennium Scholarship program afloat through June 30, 2011.
"If she had given better guidance to the Legislature, none of this would be happening," Martin said. "The tobacco settlement money is dropping. She should have known that."
He said legislators of both parties told him they might have decided against taking unclaimed property funds from the scholarship program if they had been aware of the drop in tobacco settlement money.
However, George said Marshall has no control over the amount of settlement funds and could not have anticipated the drop.
Those funds fell by $2.5 million to $16.5 million in the current fiscal year because of a decline in tobacco purchases.
To make sure there is enough money to fund the scholarship program until the Legislature meets in February, George said $200,000 in College Savings Plan Trust Funds were transferred to the program.
Martin said the pending $3 billion-plus shortfall facing the 2011 Legislature will mean lawmakers have no choice but to consider wholesale changes to the Millennium Scholarship fund and continue the program only for the most deserving students.
To receive a Millennium Scholarship, a Nevada high school graduate must have a 3.25 grade-point average or better, complete a core curriculum in high school, and pass all areas of the high school proficiency exam.
State Senate Majority Leader Steven Horsford, D-Las Vegas, promised at the end of the special session to find a way next year to fund the scholarship program permanently.
Contact Capital Bureau Chief Ed Vogel at firstname.lastname@example.org or 775-687-3901.