The Millennium Scholarship program is on the financial ropes in the wake of declining tobacco settlement payments and the Legislature diverting money to balance the budget.
Lawmakers took $7.6 million a year in unclaimed property funds away from the program to help cover the state's budget shortfall. They thought they could keep the scholarship program in the black through 2014 with money from the College Savings Program.
The board that manages the prepaid tuition and college savings programs, however, decided not to give the scholarship program the
$2 million a year. Instead, that board decided its first responsibility is to the two programs it runs, not Millennium. The members voted to send the scholarship program just $200,000.
Mark Winebarger of the state treasurer's office told the Interim Finance Committee on Thursday the board was concerned about the solvency of its own programs.
He said that decision combined with the fact tobacco money came in
$5 million below projections this month has left the Millennium about $1.3 million short of what it needs through fiscal 2011.
As a result, Winebarger said, the treasurer's office can't guarantee the scholarship will be fully funded through fiscal 2011, let alone 2014.
"It was represented during the special session that that money would be transferred," said Assembly-woman Heidi Gansert, R-Reno, referring to the college savings board decision.
She was joined by Senate Majority Leader Steven Horsford, D-Las Vegas, who also said lawmakers had been assured the transfer would keep the scholarship solvent for at least four more years. He asked for details on the scholarship's financial situation so that lawmakers can decide how to address the problem next session.
Winebarger and Steve George, chief of staff to the treasurer, said the legislative decision to take the unclaimed property money - a total of $15.6 million over the biennium - also had a lot to do with the Millennium's financial woes.
George said the future of the Millennium Scholarship program is up to the Legislature.
"Since that decision is essentially up in the air, the future of the program is going to be what you provide," he said.
The Millennium spends about $25 million a year to support college students who qualify for the scholarship. They can receive up to $80 per credit for up to 12 credits a semester at a Nevada college or university if they graduated with a 3.25 grade point average from high school.