I worked for 20 years to bring the Tennessee Education Hope Lottery to fruition. The lottery was authorized by an amendment to the Tennessee Constitution to guarantee that the funds raised could not be used by any future politicians for their pet project.
The amendment – approved by voters in 2002 – requires funds raised by the Tennessee Education Lottery to be used for scholarships for higher education, with any excess going to pre-kindergarten and after-school programs and construction projects for public K-12 schools.
The revenues are to supplement, not supplant, other state funds for education. The primary intent, modeled off Georgia’s HOPE Lottery Scholarship Program, was to prevent brain drain by keeping the best and brightest students in Tennessee for college and encouraging them to stay in the state to begin their careers.
Most projections estimated first year lottery revenues would be around $220 million. The gubernatorial administration at the time decided to set scholarship levels based on the most bearish prognostication of $160 million and to delay awarding lottery scholarships for one year. This, they reasoned, would allow for lottery scholarships to grow over time as revenue increased and allow for a rainy day fund if revenues did not meet expectations.
Instead of using the lottery funds to increase the value of individual scholarship amounts, that nest egg quickly caught the eyes of politicians who wanted to siphon funds away to other programs.
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In 2014, Governor Haslam announced and enacted his “Tennessee Promise,” which provides last-dollar scholarships for any Tennessean to attend community college. This program has no academic merit requirement, which was debated at length during the passage of the Tennessee lottery to be a critical – if not essential – component of any Tennessee lottery scholarship program.
Further, little, if any, money from the Tennessee Promise program goes to Tennesseans with the greatest financial need because many of them receive federal Pell Grants. According to Tennessee Promise Annual Report 2023, only 7.8% of recipients from 2020-21 had attained a degree after four semesters. The lack of an academic threshold for Tennessee Promise may be a reason for the lack of academic success for the recipients.
With his Tennessee Promise, Governor Haslam siphoned money that should have been used to increase the amounts of the Tennessee HOPE Scholarship, the Tennessee Merit Scholarship program and the Tennessee ASPIRE Scholarship program – all of which have high school attainment requirements.
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There are now 13 different scholarships and grants funded by lottery proceeds, which include scholarships for non-traditional students, dual enrollment grants for high school students to take college courses, foster child tuition grants, middle college scholarships. These programs may all be worthwhile, but they erode funds from the quintessential programs that the voters envisioned when they voted in favor of the constitutional amendment.
The advent of online gaming provided additional funds intended to be used to further supplement lottery scholarships for higher education.
Now, Gov. Bill Lee is trying to siphon off those funds to pay for construction and maintenance of public school buildings as part of his “Education Freedom Act.” This is the bill many are referring to as the “voucher scam bill” as it also includes $7,000 vouchers to K-12 students to attend private schools.
The proposed voucher amount is more than even our best and brightest receive for college through lottery scholarships, which provides $4,500 per year for freshmen and sophomores and $5,500 per year for the HOPE Scholarship.
General Assembly Merit Scholars, who earned at least a 3.75 GPA and scored a 29 on the ACT college assessment, receive an additional $500 per semester.
The sad truth is that over the past 20 years lottery scholarships have never been full-tuition scholarships which were envisioned by many of the people who voted for the lottery.
The dilution of lottery and gambling revenues to create new programs is unsustainable. The Tennessee State Funding Board estimates that lottery sales will decline this year while lottery program expenditures are increasing. This will cause a deficit of $22 million in 2025-26 and $21 million in 2026-27.
It is time to stop poaching from the lottery scholarship programs for shiny, new projects. Instead, the focus should be on strengthening and improving the programs that are fulfilling the primary goal of the constitutional language on the lottery – to enable citizens to attend post-secondary educational institutions in our great state of Tennessee. U.S. Rep. Steve Cohen, D-Memphis, represents Tennessee’s 9th Congressional District.
