Craig Fitzhugh

NASHVILLE — Tennessee lawmakers broke a two-year impasse over lottery-funded college scholarships Wednesday, approving an ambitious $28.1 million plan that makes it easier for students to maintain their HOPE scholarships while expanding opportunities to thousands of others.

The House voted 92-2 and the 33-member Senate voted unanimously to approve a conference committee report hammered out over two days by legislative leaders. The legislation now goes to Gov. Phil Bredesen for his consideration.

“Almost 12,000 students will be given opportunities through this,” declared Senate Education Committee Chairman Jamie Woodson, R-Knoxville, who played a key role in fashioning a compromise.

Some lawmakers questioned whether leaders are relying on overly optimistic projections in lottery growth and interest earnings on some $350 million in excess lottery funds.

“It’s the growth I’m concerned about ... as gas prices remain high they’ll buy less lottery tickets,” said Rep. Phillip Johnson, R-Pegram.

But Rep. Eric Swafford, R-Pikeville, and Rep. Brian Kelsey, R-Germantown, were the only ones among 132 lawmakers who voted against the legislation.

In other action, lawmakers worked into the night to conclude their legislative session. Senators voted 32-1 to pass an estimated $27.7 billion state budget for 2008/2009. With revenues plummeting, the appropriations bill cuts Gov. Phil Bredesen’s original spending plan and slashes the state’s work force by 2,011 people.

While regular growth in the state’s Basic Education Program is funded, another $86.5 million in anticipated funds for 2007 reforms of the BEP was slashed. But through a raid on reserve funds, Gov. Bredesen is assembling a $100 million economic development “contingency” fund that will be used to try and lure major economic prospects to the state, including a possible Volkswagen auto assembly plant to Hamilton County’s Enterprise South industrial park.

In the Democratic-controlled House, members battled over a series of budget amendments.

Having used up their 90th official legislative day Tuesday, lawmakers moved quickly to finish major legislation after months of deliberation.

Carry-over disputes from last year on how to spend excess Tennessee Education Lottery funds had occupied top legislative leaders’ and other lawmakers’ time in the waning hours of the 105th General Assembly.

Students now must have a grade-point average of at least 2.75 after 48 semester credit hours and a cumulative 3.0 GPA in subsequent years to keep their HOPE scholarships.

Arguing the standard is too high in a state with low percentages of college graduates, House Democrats fought to reduce the grade-point average to maintain the scholarship to 2.75 through students’ fifth year in college.

Under the compromise approved Wednesday, students can maintain a 2.75 cumulative GPA to 72 credit hours of college work. To continue receiving the grant, they must make a 3.0 GPA in the semester in which he or she reaches 72 hours and each subsequent semester.

That will cost $14.1 million next year and help at least 3,600 students, lawmakers said.

The bill also provides $6.8 million in lottery funds and anticipates about $3.2 million more to boost by 5,000 the number of scholarships provided to poorer Tennesseans. An estimated 1,772 older students would be helped at an anticipated cost of $3 million.

Senate Republicans, who last year rejected lowering the retention GPA at all, offered to extend the 2.75 GPA through the junior year while pushing other initiatives including helping older students.

One compromise on lottery-funded scholarships collapsed Tuesday night amid angry recriminations by House majority Democrats. Work resumed Wednesday.

In one House Democratic Caucus meeting Wednesday, Education Committee Chairman Les Winningham, D-Nashville, noted that Republicans had come a long way on the 2.75 issues.

He said “2.75 is a major, major win for us. That’s the reason the Senate didn’t act last year.”

But emotions continued to run high, with concerns raised by several black lawmakers. Rep. Gary Moore, D-Nashville, a white lawmaker, agreed with them, saying, “I think we should have held out.”

Earlier, a frustrated Sen. Woodson noted Republicans had made “tremendous concessions” and engaged in a “great deal of serious bending.”

In the end, most concerns appeared eased. But Senate Republican Caucus Chairwoman Diane Black, R-Gallatin, complained that a $400,000 provision affecting some 100 home-schooled students was removed.

“Our home schoolers have not been treated fairly,” said Sen. Black, who nevertheless joined in voting for the bill.

House Democrats gave ground as well. After opposing last year’s GOP plan to provide $100 million to $150 million for K-12 school construction, Democrats went along with a lottery-funded $90 million proposal to provide grants and loans to schools to install energy-efficient items to save money. It also is in the budget.

Sen. Andy Berke, D-Chattanooga, said he was pleased with the eventual outcome on the lottery bill.

“This bill, from helping veterans to allowing people to go back to school (and) expanding opportunities for our current students, will put our reserves to work on behalf of the people who need them,” he said.