Lt. Governor Ramsey and Senate Education Chairman Gresham announce plan to tie proposed scholarship changes to lottery revenues

 (NASHVILLE, TN), March 6, 2012  –  Lt. Governor Ron Ramsey (R-Blountville) and Senate Education Committee Chairman Dolores Gresham (R-Somerville) said today they are sponsoring an amendment to tie changes in scholarship eligibility requirements for students attending four year institutions that were proposed by a Lottery Scholarship Task Force to lottery revenue growth.   If the Lottery Corporation sustains the $10 million growth it experienced this year through the Spring of 2015 the provisions set forth in the Senate Bill 2514 would sunset.

Gresham said she asked staff to draft the amendment last week after Tennessee Lottery Corporation CEO Rebecca Paul Hargrove testified before the Senate Education Committee regarding their latest revenue reports.  Hargrove said they have experienced a $10 million growth in revenues over the past year, predicting that increase would be sustained indefinitely.  The Gresham amendment will be presented to the full Senate Education Committee tomorrow when members consider the legislation for approval.   

 “Unlike those in Washington, Tennessee is required to actually pay its bills on time – and we do,” said Lt. Gov. Ramsey. “I am committed to rewarding excellence in the classroom and giving a leg up to students who work hard. I am also committed to paying for it. This amendment will accomplish both goals in a common sense fashion.”

The total costs of Tennessee’s Lottery Scholarship Program have outstripped lottery revenues — the net proceeds from the lottery games played plus interest from the lottery reserves — since 2008.  To make up the difference, the state has dipped into the lottery reserves, an act of great concern to fiscally conservative policy makers and higher education officials who feared the lottery reserve balance would dwindle to an unsustainable level by fiscal year 2021.  These concerns prompted Governor Ramsey to appoint a bi-partisan Senate Lottery Stabilization Task Force which included the state’s top higher education officials, key State Senators and the Tennessee Treasurer, Comptroller and Secretary of State.  

“We must have a fiscally sound lottery scholarship program that will not only ensure stability for the immediate future of the fund, but makes sure it will be there for the next generation of students,” said Senator Gresham. “If the $10 million improvement is sustainable into 2015, this amendment would keep the current requirements for students attending four-year institutions in place.”

The Task Force recommended a plan which would require students who attend a four-year institution to meet both the ACT and grade point average (GPA) requirements to receive the full award beginning in the fall semester in 2015.  Under the new amendment, that provision would only apply if the Lottery does not sustain the projected revenue growth. 

The plan adopted by the Task Force would have also provided financial assistance to financially-needy undergraduate students who are residents of the state.  Approximately 5,600 more recipients would be served for each $10 million in funding provided to the Tennessee Student Assistant Award (TSAA) under the recommendation.  The grants would be available to non-traditional students of any age, including laid-off workers and other students.  That provision would also sunset if the $10 million is sustained and current eligibility requirements continue to remain in effect.

If the revenues fall short of the goal, the award to non-traditional students would apply and students who attend a four-year institution and meet one of the criteria (ACT or GPA) would be eligible for the two-year award amount.  It also provides that students who meet one of the criteria and retain the award through year two would be eligible for a full award in year three. Award amounts for students who attend two-year institutions would remain unchanged under the plan and the amendment. 

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