Tenn. lottery scholarships outstrip revenue; day of reckoning looms

Dec 21, 2009, 9:54 am (32 comments)

Tennessee Lottery

NASHVILLE, Tenn. — A day of reckoning is coming for students and parents over Tennessee's lottery scholarships that could result in tightened eligibility, reduced scholarship awards or both.

After more than five years of steadily expanded eligibility and grant amounts, the annual cost of the program is outstripping the net revenue produced by the lottery.

If no action is taken, that funding gap is now expected to overtake the lottery reserves — some $385 million built up in the lottery's booming early years and when only one, two and three classes of college students were covered — by 2013 or 2014.

If lottery proceeds don't increase, the state's only options are to make it more difficult in the future for students to qualify, reduce the amount of the grants, or both. The scholarships now range up to $5,500 per school year — the $4,000 basic HOPE scholarship plus a $1,500 supplement for qualifying students whose household incomes are $36,000 or less.

The 2003 statute that created the lottery and scholarship program require the scholarships to be self sustaining with lottery proceeds, and not tax appropriations.

The State Funding Board received a status report on the scholarship program Friday. Officials said that unless the state legislature wants students to face catastrophic cuts at once, lawmakers should start trimming the program as early as 2010.

"Clearly there is a fiscal hole facing these scholarships," state Finance and Administration Commissioner Dave Goetz said.

He said he believes the General Assembly should begin addressing the problem this coming year.

The state had to dip into the reserve fund by about $11 million on June 30 to close its books on school year 2008-09. Lottery-funded scholarships and other programs are projected to total $287.5 million in the current school year, but net revenues are projected to range from $257 million to $267 million — a shortfall of $20 million to $30 million, according to figures submitted to the Funding Board Friday. Some of that could be offset by interest earnings on the reserves.

By 2013-14, lottery scholarships are expected to reach $388 million while lottery proceeds are projected to range from $257 million to $278 million. The cumulative shortfall by that year could range from $325 million to $402 million.

Compounding the concerns for parents and students are both the sharp decreases in state taxpayer appropriations for higher education and increases in tuition and fees that are ongoing.

Ann Butterworth of the state Comptroller's Office, who presented the fiscal analysis to the Funding Board, said that dipping into the reserves reduces the amount of interest earnings the reserves generate for the program.

The popular HOPE scholarships — $4,000 a year for students who earn at least a 21 ACT score or a 3.0 grade-point average in high school — comprise 90 percent of the costs of the lottery-funded scholarship programs. About 100,000 students are enrolled in higher education this year under some form of lottery-funded assistance.

The analysis prepared by the Tennessee Higher Education Commission says changes in HOPE scholarship expenditures are largely driven by three factors:

The economy generated "significant enrollment increases" in higher education that are expected to be sustained through 2013-14.

Implementation of the Tennessee Diploma Project, a program to make high school studies more rigorous, is expected to increase the overall academic preparation of high school graduates, making more students eligible for HOPE scholarships.

The slight decline in high school graduates expected over the next few years would slightly decrease costs.

Beyond the HOPE grants, there has been rapid growth in two other lottery-funded programs: Technical Skills Grants, which provide up to $2,000 per year to attend Tennessee Technology Centers, and Dual Enrollment Grants, up to $600 per year for high school juniors and seniors to take college classes for credit.

DeSoto Appeal

Comments

Littleoldlady's avatarLittleoldlady

If Tennessee would make their games more player friendly they might not have a shortfall.  While they are checking, they need to see how many of these students got the TN Lottery education grant who have since dropped out of college.  Might shake up their numbers a bit.  The board only uses the numbers of the current projections..surely someone is checking upon how many have become academically unqualified or who have dropped out.  Ya Think?

TnTicketlosers's avatarTnTicketlosers

Dito,And they wonder people dont play..They will never compare ,it is a losing battle.And they wonder why.People I work with talk about it all the time...700 people I work with.3 shifts....They wont play ..They see to many lose...And I agree with them..We have a standing agreement on my shift.Thats bad.

Todd's avatarTodd

Tennessee needs to get rid of the computers and go back to real drawings.

x1kosmic's avatarx1kosmic

I tried to call the "FREE" hotline on the phone to get past draw numbers Saturday,

  They want to charge $9.99 a month for that now,

     I guess thats one way to raise Money.

I wonder if other States do that?   Disapprove

Todd's avatarTodd

Quote: Originally posted by x1kosmic on Dec 21, 2009

I tried to call the "FREE" hotline on the phone to get past draw numbers Saturday,

  They want to charge $9.99 a month for that now,

     I guess thats one way to raise Money.

I wonder if other States do that?   Disapprove

Wow, they charge more than a Platinum membership at Lottery Post just to get their in-state lottery results?  That's really lame.

savagegoose's avatarsavagegoose

omg imagine that lose money running a lotto. They should hand control over to a few people in here, cant do any worse.  wouldnt a plan of paying next years scholarships from this years profit be a more sustainable way? guess im to naieve for high finance.

pumpi76

Quote: Originally posted by Littleoldlady on Dec 21, 2009

If Tennessee would make their games more player friendly they might not have a shortfall.  While they are checking, they need to see how many of these students got the TN Lottery education grant who have since dropped out of college.  Might shake up their numbers a bit.  The board only uses the numbers of the current projections..surely someone is checking upon how many have become academically unqualified or who have dropped out.  Ya Think?

that´s right tennesse has one of the hardest lottery in the USA..For the kind of state that it is i am very surprise...Look i dont live in TN so i am not able to follow the Pick5 closely everyday but the Pick5 doesnt get as high as it should be and the scratchoffs are not what they should be...Tennesse doesnt even have Win For Life or Weekly Grand which it should have...there is a handful of games that it doesnt have and it should have, i dont talk about TN because California has a higher priority than TN not in image but of human features ranking something people cant see...But one thing TN got that i am glad it has is computer drawing..I got my reasons...

pumpi76

i feel they should have the weekly grand lotto instead of the TN Pick5...

MADDOG10's avatarMADDOG10

Well,

    If they got rid of Rebbecca Horrorgrove, and went back to ball drawings they wouldn't have to worry about their situation....!

rdgrnr's avatarrdgrnr

Quote: Originally posted by Todd on Dec 21, 2009

Tennessee needs to get rid of the computers and go back to real drawings.

That would make too much sense, Todd. I think we'd be more likely to see them start a state income tax to cover their habit of spending way more money than they take in. Of course they'll have to start increasing that right away too when they spend more than that brings in. And so on and so on and so on. I wonder if these guys balance their own checkbooks and spend like drunken sailors with their own money like they do with the people's. It's time to clean house in Tennessee. We have a statehouse full of mumbling, bumbling, shuffling cadavers who can't seem to come up with an original thought between them.

I doubt any one of them would even bring up the idea of going back to real drawings because it might make one of their buddies look bad for suggesting they go to computers in the first place. It wouldn't be politically correct.

pumpi76

Quote: Originally posted by pumpi76 on Dec 21, 2009

that´s right tennesse has one of the hardest lottery in the USA..For the kind of state that it is i am very surprise...Look i dont live in TN so i am not able to follow the Pick5 closely everyday but the Pick5 doesnt get as high as it should be and the scratchoffs are not what they should be...Tennesse doesnt even have Win For Life or Weekly Grand which it should have...there is a handful of games that it doesnt have and it should have, i dont talk about TN because California has a higher priority than TN not in image but of human features ranking something people cant see...But one thing TN got that i am glad it has is computer drawing..I got my reasons...

Not only that TN CANT SEE MANY THINGS..They cant see that there is: RANKINGS among the 50 states + there is human feautures ranking among Americans and among None Americans...Again is not only that but is: ¨MANY MANY MANY¨ things TN can´t see...

pcurtis's avatarpcurtis

Amen to that MADDOD10. Even on the scratchers.

Yesterday i bought 20 2 dollar jumbo bucks and had

3 winners all of them tickets.

She needs to go.

adamc224

Quote: Originally posted by pcurtis on Dec 22, 2009

Amen to that MADDOD10. Even on the scratchers.

Yesterday i bought 20 2 dollar jumbo bucks and had

3 winners all of them tickets.

She needs to go.

I have had the same luck... it is simple, people win, they tell people... who then go and spend money. they win and they tell people that they won... ETC ETC, but the people that run the show see it as people that don't win still feel like they have done a service to the community by spending their hard earned dollar to a lottery that doesn't give a <snip> about what people think because somehow they will purchase a ticket with worse odds then dying of the common cold. when the news of the hubbards that won the powerball in tn 10,000,000 years ago everyone was like wow that can happen to me!!! i was one of them! but since then jackpot after jackpot has gone elsewhere. i pray that this time.. 106 million will hit in TN. maybe then people will be like that could happen to me, and not say why do i want to play when i don't have a chance to win in TN. Sorry i will take my money to Georgia... i am tired of loosing...  

This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

TnTicketlosers's avatarTnTicketlosers

Wildwood Exit is where I go...Give it a try.

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