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.
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?
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.
Tennessee needs to get rid of the computers and go back to real drawings.
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?
Wow, they charge more than a Platinum membership at Lottery Post just to get their in-state lottery results? That's really lame.
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.
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...
i feel they should have the weekly grand lotto instead of the TN Pick5...
Well,
If they got rid of Rebbecca Horrorgrove, and went back to ball drawings they wouldn't have to worry about their situation....!
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.
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...
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...
Wildwood Exit is where I go...Give it a try.
To enhance Lottery sales, the very best thing TN could do is pick $Million Dollar winners! Forget the "one winning ticket" curse!
Pick a ticket for each Million in the pot.
They are giving away the same amount of money to more winners. It seems like that's more money in circulation etc.
I liked the Ping Pong Balls too. What the heck was wrong with that?
i agree with adamc and thudpucker...
The Tennessee Lottery could raise additional revenue if the has a subscription service. I have just checked it's website and they don't offer a subscription service. If they did have one I would subscribe.
I read of it's site, "More Than $1.5 Billion Raised For Education!", which is very impressive.
I was also thinking that recipients of scholarship awards should contribute to the scholarship program. I still donate to my college every year to assist current and future students; we all have a civic duty to give back.
I wish TN had a subscription too. It cost's me $27 in gas to make a lotto ticket trip.
Now that they dont use Ping Pong balls any more I think I'll stick to the states with subcriptions that use 'natural' drawings.
Even if they did go back to ball drawings ,they would rig that too..No one is going to do anything about Tn Lottery.
I think I was standing in line behind one of the Tennessee Lottery scholarship fund directors at Wal Mart yesterday. They had a cart full of stuff but didn't have enough money to pay for it so they started giving back some of the items.
What I don't understand is why would the Tennessee Lottery scholarship fund say they would distribute an actual amount of money based on projected lottery profits. But then again we are talking about state legislators that believe Rebecca Hargrove is the best Lottery Director in the world.
I can't wait to hear her excuses why her projections fell short by $20 to $30 million dollars.
I dont believe that. I dont think you can screw up the pingpong balls.
As well as the theory of how many payoffs the state would have to make to ensure that 'cheating' information would not leak!
Years ago a two of us went up to the bingo parler and experiemented with 10 ping pong balls. Zero through Nine.
We messed around up there with three balls as well.
You just cannot predict the drop of the ball. No one ball dropping has any relationship to the last or the next.
The numeral "8" does not weigh more than the numeral "1"
With thier machine a ball that wieghd more, would never go down past the air dam. We used syrup.
Ping pong Balls are safe. What they do with the Computer info, as far as processing the winning ticket might be suspect, but not the Ping Pong balls.
If you know of a "Cheat" that happed with the balls, I'd like to know about it too please.
Coats of paint put on a ball.
We found the heavier balls wouldnt go down. So only the lighter balls might count.
I think too many people would have to be bribed to keep something like that quiet.
i agree 100 percent i have quit playing
Don't give up tnwinner.
TN can't rig the Powerball. Keep a buck in there, you never know.
There is no reason to think TN is cheating!
Go ahead and play. If I get a ride up there, I'll play.
You are EXACTLY right with 'checking who actually graduates'. There is a non-government program starting here in CNY to fund kids going to college and they are saying that ALL kids should now be able to go to college. Problem is when you take away the 'cost' of the education then many students will 'try' but then since they have nothing invested they will drop out and not finish.
I think they should fund more basic programs while students are STILL in high school. If you make sure you reduce the drop out rate and maybe give a few more a trade/skill when coming out it would benefit us all alot more.
Ten years from now history is going to show that making college free only increases the drop out rate. Sure you will see a very-very-very small increase in graduation but the cost will not be worth it.
I dropped out of Engineering because I had to work to eat. School was way out of my 'entry level job' budget.
If I had found some body to pay at least a large enough portion of my school expenses, so I only had to work three days a week or so, I might have made it.
Today, I'd starve all prisoners to death, in order to make school money available for kids who want more education.
Thats one good way to avoid so much crime in the future.
What about us older guys who'd like to change vocation? We'd like to have a Sugar Daddy to fund some courses.
The powers that fund are stuck on 'Degrees' If you want the money for school, you have to sign up for a Degree program.
But I dont want a Degree. I just want tools to work with.
So the dropout rate might be tied to people who had to sign up for a "Degree" to get funding. But those folks only wanted some "tools" for work, and left when they had all they wanted.
Statistically it looks like they are Dropouts!
One more thing TN (et al) could do with the winnings to get people to play more is increse the winnings of 3 and 4 number draws.
Playing for $5 is not very interesting. They dont have to increase the number of draws, that will come if the Draws pay enough to increase interest in buying tickets.
That all seems so simple to me. What the hell am I missing here?
Another good point. We are so focused on the 'degree' that we miss the point of education to 'step' people up. I am in banking and we used to have the American Bankers Association that would give us courses after work. They were great, but in the late 90's they disappeared. It used to be that you had to take those courses to move up in the bank but now its just about who you know.
I do have a good way to help 'weed-out' those who would not complete school. Make the money a 'loan' and it is forgiven when you graduate. That way if you don't finish you then have to pay it back. It also will make those on the 'edge' of going/not going have to think before going.
I think AK uses your suggestion. One better, if you get your degree and work in the state for five years the loan is paid off.
That's all good ideas.
I'm still wanting those CEU's for people who just want to know more, or want new tools. Lets put an agreement on them as well.
If we finish the course and use it in this state for two years, the debt if forgiven. If not, you pay the debt back with interest on the length of the loan.
No free Education for prisoners! None ever!
PS: I was with NCR for 35 years. I went to Proof school. They gave us a Comic book to learn banking. It was so interesting I read the thing late into the night. Comics are as good for some folks as real books eh?
Yea, that is part of the issue of why we had the meltdown in the financial industry. Most people know nothing about money. I am in the industry and it was very tough to understand what and why we had what we did. The root of everything was GREED. Back in the late 90's when they repealed the Glass Steagall act the idea was 'oh the principals of the company's would NEVER take on so much risk as to lose the company'. That was what was suppose to stop this from happening. Turns out basic greed took over and the principals didn't care about the company only about how much they personally could make.
Well said Bashly. Risking it all is certainly stupid in a shooting war as well as in a Financial war.
Greed is Good! Its called Greed by the losers in the war on winning.
If you have money invested in a business, it's good that you watch what the people in control of your money are doing with it.
That's a long disertation, but its ourselves that let George do the watching, that cost us our money.
I better shut up now. I'll turn this into a Political forum in a hurry! :)