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Mayor Proposes City Funded College Scholarships as Economic Development Tool

April 02, 2008

Lexington, Ky., Mayor Jim Newberry announced last week a college scholarship plan targeting students pursing degrees in science, technology, engineering and math (STEM) fields as a means to transform the local economy into a globally competitive community by investing in the city’s youth.
The proposed Lexington First Fund would provide full tuition to every Fayette County high school graduate for up to four years at any institution of higher education located within an hour’s drive of Lexington. The only requirement is that students must pursue an associate or bachelor’s degree in a STEM field or a teaching degree in one of these fields. The idea is that by encouraging residents to pursue STEM fields, the local economy will reap the benefits of a highly skilled workforce. The plan also aims to promote attendance at local institutes of higher education and attract high-tech industries to the city.
Mayor Newberry hopes to produce the same impact that has already emerged in Michigan from a program still in its infancy, the Kalamazoo Promise scholarship. Beginning with the class of 2006, students enrolled in the Kalamazoo public school system from kindergarten through high school were eligible for four years of tuition and fees at any Michigan public college or university – regardless of their field of study. A report by the Community Foundations of America found that in the first 14 months of the program, enrollment in local high schools increased by 10 percent, 300 small businesses relocated to Kalamazoo, the value of homes increased by 7 percent, and 45 new teaching positions were created.
Since it was unveiled in 2005, the Kalamazoo Promise scholarship program has received widespread media coverage and has prompted several studies into the short- and long-term outcomes. The W.E. Upjohn Institute has been involved in research, evaluation and community mobilization efforts since the program’s inception, and a book is due later this year on the origins and initial impact of the program, including alignment of the community around its goals.
The major difference in the two programs, however, is that Mayor Newberry wants taxpayer money to fund the Lexington scholarships, and in Michigan, the program is entirely funded by a group of anonymous donors. A major part of the mayor’s campaign platform, the Lexington First Fund, is expected to be included in the new budget proposal for the upcoming fiscal year. The plan has received a tepid reception from some Urban County Council members, who must approve the plan, according to an article in the Lexington Herald-Leader. Members of the council questioned using city money to start a new program while facing a projected budget shortfall of $25 million to $30 million, the article states.
While it is undetermined at this point how much the program will cost the city, Mayor Newberry’s plan calls for support by both public and private contributions and requires recipients to seek available financial aid to reduce the scholarship amount. Similar to the Kalamazoo Promise, the Lexington First Fund would offer 100 percent tuition to students who have attended school in the county from kindergarten through 12th grade and provide up to 40 percent for those who have attended at least four years of high school.
A fact sheet with more information on the Lexington First Fund is available at: http://media.kentucky.com/smedia/2008/03/25/18/LexingtonFirstFundFacts.source.prod_affiliate.79.pdf