Slipping lottery funds sidelined Tennessee governor's scholarship plan
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Gov. Bill Lee's pitch to add scholarship funding to help technical college students pay for equipment and books is on hold for at least a year because of a dip in lottery revenue.
Why it matters: Most Tennesseans can go to technical colleges tuition-free. But existing scholarships don't always cover the full price of attendance, which includes costly supplies and other fees that can add up fast.
- Those extra expenses stop many from enrolling.
State of play: Lee's $12.1 million plan, part of his initial budget proposal introduced in February, would have drawn from lottery proceeds.
- Lottery funds pay for several state scholarship programs, including Tennessee Promise and the HOPE Scholarship.
Yes, but: Lottery revenue is slipping, and there is less money to go around. Game revenue dropped by more than $70 million in fiscal year 2024, according to state data.
By the numbers: Tennessee Education Lottery Corp. collected $501.3 million for lottery-funded education programs during fiscal year 2024, which ended last June.
- The corporation estimates those programs will continue to dip during the ongoing 2025 fiscal year, and they could fall below $475 million.
Between the lines: A number of factors, such as inflation or gas prices, could be driving the revenue loss. Lottery officials tie the decline to the rise of legalized sports betting, which Tennessee approved in 2019.
Zoom out: Sports betting revenue that previously flowed to lottery-funded scholarship programs has been rerouted to K-12 school upgrades as part of Lee's voucher plan, which became law this year.
The big picture: Technical colleges provide major muscle for the state's workforce development efforts. (A special Tennessee College of Applied Technology site is being built alongside a massive Ford plant in West Tennessee to help prepare employees.)
- TCATs educate workers in manufacturing, auto repair, nursing, construction, mechatronics and other key fields.
- Tennessee doesn't have enough workers to fill all the open jobs in the state. Most businesses report a lack of trained workers.
What they're saying: Lee's spokesperson tells Axios the governor expects to revive the scholarship plan in an effort to build out the workforce.
- "Governor Lee will continue working in partnership with the General Assembly to establish the Tennessee Works Scholarship," spokesperson Elizabeth Johnson said.
- "As we continue to monitor lottery revenues, we have full confidence that these dollars will continue to be an important resource in funding Tennessee's educational priorities."