Lawmaker wants lottery funds returned
Posted: Monday, August 23, 2010 8:47 pm
MEMPHIS (AP) — A Tennessee congressman wants state lawmakers to return nearly $70 million in lottery proceeds to scholarships that they diverted into an energy-efficient schools program two years ago.
The Memphis Commer-cial Appeal reports that U.S. Rep. Steve Cohen, a Democrat from Memphis, sent a letter to legislative leaders that a new fiscal analysis is troubling because it shows scholarship grants are not keeping up with tuition.
An analysis of the lottery scholarship program projects shortfalls between expected lottery proceeds and the costs of scholarships of $17 million in the school year about to start, $22 million in 2011-12, $21 million in 2012-13 and $19 million in 2013-14.
The deficits are far less than projected last year but are still eating into a $319 million lottery reserve fund built up in the early years of the lottery when scholarships were being phased in.
Cohen, a former state senator who sponsored the lottery amendment to the state constitution ratified by voters in 2002, wrote Sen. Jamie Woodson and Rep. Harry Brooks, both Knoxville Republicans, on Wednesday to express concern over the shortfalls and the diversion of more than $160 million from scholarships to energy efficient schools and pre-kindergarten.
The main Hope scholarship paid for 77 percent of a recipient’s average tuition at a Tennessee public university in 2007-08, the year the base Hope grant was raised to its current level of $4,000 per school year, according to the new Tennessee Higher Education Commission analysis.
The Hope will pay only 63 percent of average state university tuition this year. The Hope base grant started at $3,000 in 2004 but has not been increased in four years. Tuition and fees have increased annually, by double-digit rates in some years.
Meanwhile, in 2008, when the scholarship program had nearly $400 million in its reserve fund, lawmakers created the Energy Efficient Schools Initiative and transferred $90 million from the reserves to fund it. It’s designed to help local school districts install new energy efficient lighting, heating and cooling systems.
But EESI’s website says only $13 million in grants and $3.8 million in loans have been approved.
Estimated annual deficits in the Hope scholarship program are projected to rise to $110 million in 2014 and eat up the reserve fund by then. That estimate issued in December prompted legislative leaders to create a Lottery Scholarship Stabilization Task Force this year.
The panel of legislators and higher education officials met for the first time last Monday, when it was given the newest projections.
Published in The Messenger 8.23.10