Tennessee Lottery Fund Has Run Out of Money

Tennessee’s 2010 graduating class may be surprised to find out that the Tennessee State Lottery Fund may be out of money by the time they graduate. This could mean fewer scholarships awarded, thus, fewer high school graduates attending college. Do we really want to see fewer students attending college? Higher education should be seen as a priority in Tennessee and an investment in Tennessee’s economy.Data show that Tennessee ranks dead last nationally in the number of ninth grade students that continue their education and earn their degree. Fewer college graduates result in lower wages for Tennessee workers. Because of this lower wage base, Tennessee loses about $400 million of lost revenue. More funds need to be in place to send more high school graduates to college.

What has happened to the lottery scholarship? The state’s lottery fund is projected to have deficits of $20 million a year for years to come. This means that scholarship awards could be lessened or at least not increase for the years to come. Either way, parents and students may not be able to rely on the states lottery scholarship to assist in covering tuition costs.

Since 2004, lawmakers have found creative ways to spend lottery money and have committed millions to fund other programs. Included are medical grants for students who will agree to work in rural areas, the purchase of lap-tops for high school students who are dual enrolled and money for K-12 schools to purchase more energy efficient fixtures and equipment. Governor Bredesen appropriated $100 million of the funds to launch his pre-kindergarten plan. U.S representative Steve Cohen says, “The lottery is bringing in enough money. Its problem is with implementation. It didn’t get implemented right.”

What can be done to save Tennessee scholarships? Senator Jim Kyle proposed a bill that would return $90 million to the fund, however the bill was not passed. This year’s deficit will be covered by taking money from the lotteries own reserves. This is not a long term fix. The lottery is dependant on the interest from these reserves to fund scholarships. When the amount in reserve drops, so does the number of scholarships. Thus, a cycle of shortage is created.

Raising the requirements for qualification for scholarships could be another possible solution. Higher standards will result in fewer awards thus, money will be saved. Another option is to lower the amount of money awarded to each student. Both of these ideas could result in fewer Tennessee students attending college, however.

Tuition rates have risen 50% over the last eight years making it harder for many to attend college. Tennessee lawmakers need to stop raiding the lottery fund and fulfill its obligations to Tennessee students, It is what is best for the students and the state of Tennessee.

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