Tracy Subcommittee makes recommendations for disbursing lottery excess dollars

March 20, 2008

Tracy Subcommittee makes recommendations for disbursing lottery excess dollars

(NASHVILLE, TN), March 20, 2008 — The Lottery Subcommittee looking at proposals for disbursing excess lottery funds, chaired by Senator Jim Tracy (R-Shelbyville), has recommended several bills for passage to the full committee.  According to Tracy, there is $460 million in the lottery reserve account, of which $50 million must be kept in savings under current law.

The Tracy subcommittee is one of two appointed by Education Committee Chairman Jamie Woodson (R-Knoxville) looking at various proposals regarding lottery scholarship funds.  The other subcommittee, chaired by Senator Bill Ketron (R-Murfreesboro), is reviewing proposals regarding the recurring lottery scholarship fund, which included the proposal to lower the GPA to 2.75.

Tracy and Ketron voted to recommended legislation to set up a $25 million endowment fund to provide Tennessee veterans who have served in Iraq and Afghanistan with a scholarship of up to $1,000 per semester.  Total benefits are capped at $8,000 and the scholarships must be used within eight years of the end of military service.  Over 12,000 Tennesseans have been deployed to Iraq and Afghanistan.

“Our veterans have served on the front lines for our country, and the least we can do is provide an affordable way for them to get a college education when they come home if they have not already graduated,” said Tracy.  “I am proud to make this a priority of my subcommittee.”

The Subcommittee also recommended passage of legislation sponsored by Senator Randy McNally (R-Oak Ridge) that would set up an energy efficient school program
aimed at helping schools save money on their energy bills.  The proposal partners the state with TVA, Oak Ridge Laboratory, and other energy experts by setting up a Council that would guide schools in energy-saving options.  The Council would also provide a system of grants to help schools purchase any construction or renovations needed
for the conservation efforts.

The Subcommittee recommended use of $200 million of the lottery surplus to create an endowment for the Tennessee Student Assistance Corp. (TSAC), which makes grants to low-income college students. The bill would allow for distribution of about $9 million in grants off the interest of the funds.  Last year, the Senate Education Committee under the leadership of Education Chairman Jamie Woodson (R-Knoxville) approved legislation for TSAA grants to allow more non-traditional students to have access to those grants.  The grants would provide scholarship opportunities to an additional 13,500 students from interest earnings.

 “We passed in our version of it a non-recurring appropriation of $10 million to enhance our TSAC program that was reflective of a lock box constituting $200 million, so we could conservatively count on a recurring interest,” said Chairman Woodson.  “We are pleased this initiative is moving forward.”

The Senate Education Committee approved legislation, sponsored by Senator Tracy, last year that would distribute at least $100 million of the surplus directly to school districts for use in K-12 construction or renovation.  That bill will be considered again after it was moved from the Finance Committee to the Education Committee by action on the floor of the Senate this week so that it can be considered in unison with the other proposals.  The school building bill is designed to help local governments keep up with student enrollment growth and needed improvements.

“I am optimistic that this bill will be approved this year,” said Tracy. “There are too many schools in Tennessee with portables and crumbling buildings that house our K-12 students.  Our local governments desperately need these funds to keep up with the escalating costs of construction and renovation.  I continue to receive support from school
boards, local government officials, and others across the state for this needed proposal.”

The state’s constitutional amendment limited the lottery money to college scholarships, expansion of new pre-k and after school programs, and capital improvements for major improvements or building K-12 schools. The only facet of the 2002 Constitutional Amendment creating the Tennessee Education Lottery yet to be enacted by legislation is
granting the use of excess lottery reserves for new capital outlay projects for Tennessee’s K-12 educational facilities.

Tracy’s subcommittee voted to increase the savings to $100 million in order to provide a greater cushion to protect scholarships in cases of a downturn in lottery revenues.

“Overall, I think we have made solid recommendations to the full committee,” Tracy added.  “I am pleased with the work of this subcommittee.”

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