Excess money would be distributed to school districts
Tennessee Gov. Phil Bredesen said Thursday the state lottery's huge cash reserves need to be distributed.
Bredesen, a Democrat, has abandoned last year's proposal to create a $100 million pool that would have served as collateral to improve credit ratings for school districts, he told The Associated Press in an interview Thursday.
"The legislature wanted to spend it, they didn't want to put it aside to enhance credit," Bredesen said. "They wanted to write checks."
The lottery has about $400 million stored up in its reserves. The constitution restricts lottery money to scholarships, early childhood education and K-12 school building projects.
"The reserves are vastly in excess of what we need in the lottery and ought to be distributed out," Bredesen said.
The governor did not detail the mechanism for how he'd like to see the money distributed or how much he would prefer to spend.
House Republicans proposed distributing about $150 million last year in lottery reserves among the state's 136 school districts on a per-student basis.
The governor said he wants to target the distribution of lottery money to encourage school districts to use the money as a supplement — and not a substitute — to their existing construction and maintenance efforts.
"I was hoping to do it in a somewhat more directed way than just writing checks for what would be relatively small amounts of money after you distribute it to 1,600 schools," he said.
Bredesen said he will detail his plans for spending lottery money at his state of the state address this month. The speech will include ideas for tweaking lottery scholarships, he said.
Bredesen said he'd like to find ways to improve retention rates for the $4,000 lottery scholarships, especially because poorer students are likely to suffer most from losing them.
Students must currently earn at least a B-minus average in their first year at college, and a B average after that to keep their scholarships. There is no provision for earning back the grant once it is lost.
"When that happens, it hurts people who are poorer, because they don't have somebody to just step in and pay the tab for them," Bredesen said.
Democrats in the legislature have put forward proposals to lower the required grade point averages to maintain a scholarship. Republicans have balked at that idea but agree there should be a way to earn back a lost scholarship.
Bredesen said the lottery scholarships could move beyond being solely a merit-based program because not enough help is available for students who need financial help to go to college.
One area where Bredesen said he expects to make little progress is in resurrecting last year's failed proposal to offer free community college tuition for any high school student with a C average.
"There was strong opposition to that in the Senate Education Committee, and for that reason I don't have any great hopes for it this year," he said.