Revised Tennessee Lottery scholarship bill advances

Threat closes schools in Clinton County, Ky. (Image 1)

Senate Democratic leaders say a revised proposal that would make cutting some students' lottery scholarships in half contingent on lottery revenues is unnecessary because the measure wouldn't be effective for at least another three years, but their Democratic counterparts in the House may go along with it.

The Republican-backed measure passed the Senate Education Committee 7-2 on Wednesday. The companion bill was postponed for at least a week in a House Education Sub-Committee.

The original legislation sought to reduce by 50 percent the award – called the HOPE scholarship – for students who do not meet both standardized testing and high school grade requirements. A special panel of lawmakers recommended the proposal in November.

Right now, students can get a scholarship worth $4,000 for each of four years if they either earn a 3.0 grade point average in high school or score a 21 on their ACT college entrance exam.

Last week, Tennessee Lottery officials told the Senate Education Committee that the lottery has set record gross sales every month since July. Lottery education proceeds have increased 4 percent since 2005, with about $10 million more coming in a year. About $14 million is projected for this year.

On Tuesday, lottery officials announced record sales of $130 million in February.

Under the new legislation, the lottery scholarship requirements won't change if lottery proceeds of at least $10 million are sustained through 2015. Lottery officials said they don't expect it to drop.

Democrats say such figures and the fact that the proposal wouldn't take effect until later are reason to table it all together.

“I think we're passing something just to pass something,” said Sen. Andy Berke of Chattanooga, who voted against the proposal.

Senate Democratic Caucus Chairman Lowe Finney of Jackson said outside the committee meeting that he would be open to monitoring the lottery's proceeds next year or the year after, but doesn't see a need for the proposal.

“The appropriate response this year would be to pass nothing,” he said. “That's been our position all along.”

Sen. Dolores Gresham, chairwoman of the Education Committee and the bill's sponsor, said the legislation was initially proposed because the cost of the scholarship program was outpacing lottery revenues. To make up the difference in the short term, the state has dipped into the lottery reserves, which is more than $300 million.

“We were not going to put the lottery scholarship program in jeopardy,” she said. “We wanted to make sure the lottery scholarship program is viable in the long term and that we can serve as many Tennessee students as possible.”

Gresham said she decided to have the amendment drafted after hearing testimony from lottery officials.

“If we can pay our bills, then that's great,” she said. “We don't need to change the eligibility criteria.”

House Democratic leader Craig Fitzhugh seemed to be behind the new Senate Republican measure when he talked with News2.

“I think the Senate has agreed to maintain the same course that, oh yes I am certainly for that,” said Fitzhugh.

4-dollar gasoline, maybe five dollar gasoline, we will see expendable income go down, those lottery revenues will drop again, and we may be in the same boat this time next year.

The amendment also comes after Democratic Senate Minority Leader Jim Kyle of Memphis led House and Senate Democrats in calling on Republican Gov. Bill Haslam to stop the original proposal, which they said would make more than 5,000 students ineligible for a full scholarship.

“The jobs of the future depend on increasing our college graduates now,” Kyle said in a statement. “Tennesseans know this is no time to cut college scholarships.”

Rich Rhoda, executive director of the Tennessee Higher Education

Commission, said the new proposal is “a good way to proceed.” He said some mechanism should be in place to protect lottery reserves.

“I would hate to see the reserve be spent down and a few years from now we wonder why we didn't act earlier,” he said.

Amidst all this, Lt. Governor Ron Ramsey warned of the future.

“I would like to say that with 4-dollar gasoline, maybe five dollar gasoline, we will see expendable income go down, those lottery revenues will drop again, and we may be in the same boat this time next year,” said Ramsey.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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