Fight over lottery money brews

Legislators will clash over how it is spent, who gets scholarships

 By SHEILA WISSNER
Staff Writer
December 25, 2007

State legislators are gearing up for a fight next year over how to spend lottery profits, including a likely battle over whether lottery scholarships should be opened to poor teens whose grades are too low to meet the current standards.

The nearly 4-year-old Tennessee lottery has a surplus of about $400 million.

Legislators last session proposed various ways to spend it. Republicans and Democrats blocked each other’s proposals, though, and little got done.

Lawmakers on both sides of the aisle say they are ready to try again, and expect the tussle over spending lottery money to be among the top issues when they go back into session Jan. 8.

“I think there is a clear distinction between Democrats and Republicans on this issue,’’ said Senate Democratic Leader Jim Kyle of Memphis.

“That is something that I think is going to take a great deal of our time,’’ he said.

Gov. Phil Bredesen and many Democrats would like to open the scholarships to students making C-plus grades and focus the program more on helping low-income students.

Republicans want to preserve the existing academic standard, a 3.0 grade point average. They also favor giving lottery money to school systems for construction projects.

The governor backed a program last session to set up a loan fund that would have helped schools’ capital needs.

Both sides also propose opening scholarships to military veterans.

2-tier system proposed

The governor said during budget hearings that he planned to ask legislators their opinions about revamping the entire lottery program into a two-tiered system.

As an example, he said, such a program might allow lower-income students to qualify with grade point averages of 2.5 while those with higher incomes would need 3.5 grade point averages to qualify for academic scholarships.

U.S. Rep. Steve Cohen, D-Memphis, a former state legislator and primary architect of the state’s lottery program, has said previously that he opposed a two-tiered system but approved of tilting the program more toward need.

House Majority Leader Gary Odom said members of the House Democratic Caucus, and some Senate Democrats, believe the grade point average should go as low as 2.5, both to qualify for a scholarship and to keep it.

Odom, a Nashville Democrat, said most students receiving lottery scholarships lose them, in some cases because of trouble making the transition from home to college or because of problems juggling school and a job.

Lowering the GPA would open the program up to 30,000 more students, he said.

“I think, personally, that would be a very positive thing to do in the state,” Odom said.

But that plan “could get contentious,’’ said Senate Republican Leader Mark Norris.

“I have not spoken to the governor yet,’’ said Norris, of Collierville, “but if he only wants to make it needs-based, without dealing with the educational achievement end of it, that could be a slippery slope and make it more of an entitlement than a true scholarship.”

Construction use is issue

House Minority Leader Jason Mumpower of Bristol said Republicans would again push to send the lottery surplus to communities to use for school building projects. The effort failed last session.

“There is over $400 million in excess lottery funds today and it will only continue to grow,’’ Mumpower said.

He added that using some of it to give school systems capital funds would not eat into the scholarship money.

Democrats such as Odom say using the lottery surplus for capital projects will “cheat” students Democrats want to help out of scholarship money.

Additionally, the amount of money that school systems would get under the Republican plan would be too small to help schools very much with their building needs, they say.

“So I think that is going to be a major discussion, because I know they are contacting county commissioners now and saying, ‘Pass a resolution asking for this,’ without, as they typically do, giving a full picture of what the ramifications are,” Odom said.

Legislators from both parties want to help veterans go to college, but disagree on details.

Democrats, for example, want to offer scholarships to Iraq and Afghanistan war veterans; Republicans don’t want to limit the bill to those wars.