Democrats: Lottery growth weakens cuts argument

Democrats: Lottery growth weakens cuts argument

March 1st, 2012 by Andy Sher in News

Tennessee Senator Andy Berke

Tennessee Senator Andy Berke

NASHVILLE - New figures showing record sales for the Tennessee Lottery undercut Republican arguments that the program needs tougher standards for students to win lottery-funded scholarships, Democratic lawmakers say.

A college education is "one of the most important economic drivers we have," said Sen. Andy Berke, D-Chattanooga. "It is short-sighted and a mistake to cut lottery scholarships. The signal that we send to people in 9th, 10th and 11th grade is the wrong one when we cut scholarships."

Earlier in the day, Tennessee Lottery President Rebecca Hargrove told the Republican-controlled Senate Education Committee that net lottery proceeds for the Hope Scholarship program were $10 million above projections for the first seven months of this fiscal year over last year.

She said the lottery, which has not seen a decrease in sales since its inception, should be able to maintain that.

Majority Republicans are pushing a bill that would cut lottery scholarship awards for students who don't score a 21 on their ACT tests plus a 3.0 high school grade-point average. Currently, they only need one or the other.

Students who don't meet the new standard and who wish to attend four-year institutions would see their $4,000 annual scholarship slashed in half.

The bill's sponsor, Senate Education Committee Chairman Delores Gresham, R-Somerville, later said the lottery's revenue growth isn't enough to deter her from moving ahead with the measure. Scholarship demands still exceed revenues, she argued.

"We are very fortunate that we have enough reserves right now to carry us a few years, but you cannot keep spending more than you're taking in," Gresham told reporters.

The $10 million amounts to about half the estimated $17 million to $20 million difference between lottery-generated funds for education and scholarship costs. Tennessee's lottery has more than $300 million in reserves.

Republicans' bill is projected to save the lottery scholarships as much as $19 million a year starting in the 2016-17 fiscal year.

About 8,200 students would see their scholarships cut in half, according to a legislative analysis.

Because the state would increase another scholarship program for low-income students by $10 million a year, the net savings to the state would be about $9 million, fiscal analysts say.

Gresham said she intends to push forward with the tougher lottery scholarship requirements.

"We're spending more than we're taking in. You can't do that," she said.

During her presentation, Tennessee Lottery President Hargrove said the higher figures for the seven-month period ending Jan. 31 cover just two weeks worth of recent changes to the national Powerball lottery.

Lottery ticket prices rose from $1 to $2, which has been accompanied by increased player interest due to fast-growing jackpots. It's already led to an 81 percent boost in Powerball sales in February, Hargrove said.