Republicans, Dems debate who should bear brunt of lottery scholarship fund restrictions

Sunday, October 9, 2011 at 10:05pm

With state lawmakers studying how to cut costs in the state’s HOPE lottery scholarship program, Senate Democratic leader Jim Kyle is urging them not to deny grants to thousands of college-bound kids unnecessarily.

In a letter to legislators this month, Kyle called for using the lottery fund like an economic stimulus.

He pointed out that, while the lottery fund indeed is running at an annual deficit now, it’s still flush with $373 million in reserves built up by surpluses in the early days of the seven-year-old program before many scholarships had been given.

At the current rate of expenditure, it will take until 2024 to drain the surplus to $50 million, the lowest level state law allows. So, Kyle asks, why tighten scholarship eligibility now when the economy’s in the dumps and unemployment stands at nearly 10 percent? 

“Our talks so far have been all about money, when they should be about putting Tennesseans back to work,” Kyle said. “The lottery fund was designed to give more Tennesseans the opportunity at a good education and an even better job. That should be our top priority now more than ever.”

“This is like not feeding your infant child because you are saving up to buy them a car when they’re 16.”

A special committee of lawmakers and higher education officials is considering eligibility changes that would exclude nearly 3,000 students from the $4,000-a-year HOPE scholarships. With the state’s unemployment rate stuck at nearly 10 percent, Kyle called on lawmakers to focus instead on increasing access for students.

“The Lottery for Education account has more money in reserves than it pays out each year in scholarships, and yet we talk about its looming insolvency,” Kyle wrote. “I don’t know a single person with more money in their savings account than they spend in a year who considers themselves broke.”

“In this time of economic uncertainty, we must use what resources we have to ensure that people are prepared for what is to come; if we do not, the world will leave us behind,” Kyle wrote. “Rather than saving for a future that may never arrive, why not utilize the resources we have for the betterment of
Tennessee now?”

Leaders of the Republican-run legislature seem more interested in putting the lottery program on solid financial footing now rather than waiting until the economy improves. Depending on what happens in next year’s session, the debate could shift to the 2012 campaign trail in legislative elections across the state.

The Haslam administration is working separately on a set of recommendations for the legislature. Gov. Bill Haslam said he’s for “a very measured approach” to the lottery money issue. 

“We are spending more than we’re bringing in and we can’t keep doing that and kicking the can down the road, as they say. So I do think we should begin to come up with a way to address that sooner,” he told reporters. “I think having that savings account, the rainy day fund, allows us to work toward getting one that is in balance. But it’s not fair for us to just to keep using more than we bring in and let somebody 10 years from now worry about it. ... We’re actually as an administration looking at all the different ways that you could shrink that gap right now and I think by the time the legislature comes around we’ll have a voice in all of that.”

Some lawmakers want to implement changes now to save at least $17 million a year — the amount of the annual deficit the lottery fund is running.

Students now qualify for the basic Hope Scholarship by achieving a 21 ACT score or a 3.0 high school grade-point average. There are 20 options on the table, all proposals from higher education staffers. Among them: 

•  Requiring both 21 ACT and 3.0 GPA.

• Requiring both ACT and GPA for HOPE scholarships at a four-year school. Others could go to a two-year school with a $2,000-a-year grant.

• Requiring 23 ACT or 3.25 GPA.

• Reducing grants for freshmen and sophomores at four-year schools to $3,000 and raising it to $3,000 at two-year schools. Under this plan, the scholarship would stay at $4,000 for juniors and seniors.

• Eliminating high school eligibility standards altogether and requiring either 2.5 or 2.75 GPA in the first semester of college to qualify for the scholarship in subsequent semesters. That would end grants for the first semester of college.

• Capping family income on eligibility at $100,000 to save $66 million annually, at $150,000 to save $27 million and at $200,000 to saves $13 million.

Of all the ideas, the income caps are perhaps the most unlikely to clear the legislature. They were considered — and rejected — when lawmakers first developed the program. Some legislators argue HOPE scholarships should go to the “best and brightest” kids to encourage them to stay in Tennessee. If wealthy children are excluded, that would defeat that purpose, they say. 

Others, like Kyle, argue the money should go to increase the woefully low percentage of Tennesseans with college degrees, meaning more scholarships should be awarded to low-income children. 

The special committee is supposed to make recommendations by Dec. 1. At its last meeting a month ago, one member — Sen. Randy McNally, the chairman of the powerful Finance Committee — suggested the time to act is now.

“There certainly no emergency now but the longer it takes us to address the problem the bigger it will get and the harder it will be to address,” said McNally,  R-Oak  Ridge.

“We don’t intend just to kick the can down the road,” replied the committee’s chair, Sen. Delores Gresham, R-Somerville. “We’re going to do something, yes.”   

9 Comments on this post:

By: Nitzche on 10/9/11 at 10:34

where is mike turner? as the spokesman for special ed, i need to know his thought

By: govskeptic on 10/10/11 at 5:45

Those that have shown the most effort in doing well in High School
should always be at the front of the line for these lottery dollars.
They are the most likely to actually attend and "finish" college,
whereas far too many others take the money and only attend a few
semesters on both lottery and student loans dollars without
putting in any effort and then dropout!
Sen. Kyle would have the dollars handed out like Halloween candy
which deletes the dollars available to the serious students.

By: BigPapa on 10/10/11 at 6:55

It would appear that the only logical solution would be to make it more difficult to get the "scholarship."

By: pswindle on 10/10/11 at 9:15

Here we go again, keep politics out of this and reward all young that deserve the money. Everytime those in need are helped the GOP wants to stop it.

By: san r on 10/10/11 at 9:36

the powerful finance committee.
i'm trying to, patiently, wait on my ONE BIG WIN and the lottery will be history for me.
they are also talking video machines in corner markets, the way it use to be when i went completely bankrupt. gambling is a devastatingly, compulsive, pathological habit that easily leads into a character altering disease.
the ones in greater debt and need are the ones whose children will suffer the most cause momma ain't got no money and the kids ain't got no-more-scholarship. generational curses on us, AGAIN. like public housing and low-income segregated habitats. SEPARATION and more SEPARATION.

By: BigPapa on 10/10/11 at 10:23

Where did it say the GOP wanted to end the scholarships? I think it said that the fund is gong broke and that unless it's some how made more restrictive, then there will be no money for anyone.
No need for hyperbole.

By: govskeptic on 10/10/11 at 10:34

pswindle has the oddest of takes on so so many stories. Stating: "reward all
young that deserve the money"! He joins Sen Kyle in the Hand it out to all
that appears at the door without regards to any merit and as if it is Halloween candy and has no bottom to the pool. NEED verses " give me something for no effort" are totally in opposites, and those days are ending for many programs!

By: RTungsten on 10/10/11 at 11:07

Simple solution, have the "scholarship" be granted once you finish college. Base the numbers off your COLLEGE GPA and not your high school GPA where everyone gets a 2.5 for showing up. When you graduate, you get the full amount to help payoff loans. In the meantime, the state has longer to accrue interest on the pot of poor peoples' money who play the "lottery".

By: DREIFMA on 10/10/11 at 10:23

Just like the Democrats to say spend it all, we will find a way when the day the bill comes due. Havent we learned from Social Security and Medicare that the money is not going to be "found" and it wont take care of itself. I can hardly believe that a SAT 21 is a satisfactory score for admission and a scholarship to university. Those people dont have much of a chance. A B average with a 21 ACT score is grade inflation. What a joke. That should be at best a C. Raise the act score to 23 and forget the grades, too much grade inflation. If you base it on a college GPA, there should be a different level for each major. Medicine,Physics, Math and Engineering majors with 2.2 College GPA is reasonable due to the rigour of the material and the fact that they will actually produce things of Tangible Worth. Try educating yourself with just the books in those majors. On the other hand, History, Phys Ed, English, Sociology, Communications and other such soft majors of intangible worth need to have a 3.0 or better. Most of these you can learn by reading books. I can hear the boo hooing and hate mongering now. More and more graduates are finding their degrees arent worth the paper they are printed on. Thats why we have these currently in vogue protests against successful people and organizations. The people of Tennessee need to realize that all college degrees do not carry equal value and should get what they believe they are paying for.