A state Senate Republican who pushed unsuccessfully to expand student eligibility for Tennessee Lottery-funded HOPE scholarships plans to take up the cause again next year.
Doug Overbey of Maryville, along with Democrats Jim Kyle of Memphis and Lowe Finney of Jackson, couldn’t overcome opposition by GOP Senate Finance Committee members in the closing days of General Assembly last month. Republicans on the committee argued that spending more from the lottery reserves may cripple the state’s ability to fund education initiatives from that revenue source in the future.
Overbey told TNReport recently that he’ll continue to pursue Senate Bill 710, which would allow HOPE scholarship recipients to keep their funding for eight semesters — or the equivalent of four years — regardless of the number of credit hours students take.
Currently, students lose the funds after 120 hours.
The problem with the present arrangement, Overbey said, is that students are now cut off from the funding, often as they are nearing completion of their degrees. Although most students must accumulate 120 hours to graduate, some degrees require more than that, while other students may take additional hours after deciding to change majors.
The HOPE scholarship, which is funded through lottery proceeds, provides partial funding for use at universities, junior colleges and some technical schools to Tennessee students meeting certain academic requirements. HOPE last year paid out more than $147 million to more than 43,000 students.
Overbey’s bill was defeated on a 6-4 finance committee vote on April 16–as Overbey was the only Republican to vote in favor with the committee’s three Democrats. While SB710 failed largely along partisan lines, Overbey said later he’s “not convinced Republicans are opposed to the bill.”
“The way I interpreted things is that, in the give and take of budget negotiations with the House, this was just not one of the things that got funded,” Overbey said. “Frankly, I don’t see how anybody could be opposed to allowing qualified students eight semesters of the lottery scholarship regardless of the number of hours that they are able to pass.”
Sen. Bo Watson, R-Hixon, raised concerns that the measure’s $2.4 million annual price tag may threaten the lottery’s future financial viability.
“The lottery has a finite amount of money,” Watson, the Senate’s speaker pro tem, told TNReport at the close of the session. “The history of lotteries across the country—state lotteries—is they reach a certain point where they don’t grow a lot and they don’t shrink a lot, and one of my concerns is that, when we put new ideas forward that we have to fund out of the lottery, that we may in the long run damage the sustainability of the lottery.”
The lottery’s reserve fund has a current balance of $373 million, according to Tim Phelps, associate executive director for grant and scholarship programs at the Tennessee Student Assistance Corporation, which oversees HOPE. But interest payments on the account, which are used to fund the scholarships, sank from $16 million last year to $13.5 million this year. Phelps wouldn’t speculate on the potential impact of Overbey’s proposal.
Gov. Bill Haslam in 2011 signed reforms that increased the amount of money students could receive, allowed the money to be used for summer classes and implemented the hours cap.
Overbey said summer classes would not be impacted, and a Haslam spokesman said talks on the legislation would continue.
Finney, the Senate Democratic caucus chairman, said that the lottery’s intent was to pay for education. Minority Leader Kyle added the proposal amounted to less than 1 percent of either the state or lottery reserve fund.
Watson said Kyle’s viewpoint doesn’t recognize that the reserve also funds other scholarships and the administration of the lottery itself.
The lottery funded a total of $313 million in scholarships last year, including HOPE.
Alex Hubbard can be reached at email@example.com