In his fourth annual State of the State address on Monday night, Gov. Bill Haslam unveiled the "Tennessee Promise," a program that will offer two free years of community college or technical school to all of Tennessee's graduating high school seniors.
Haslam's "Promise" will be financed through a substantial depletion of the Tennessee Lottery Fund, leaving $110 million in the fund to ensure continuation of the HOPE and other scholarships.
Despite this loss, Haslam maintained that residual funds will remain at a "healthy" size. The first-term governor noted that he is currently asking nonprofits and private corporations to cover administrative costs of the program.
"Net cost to the state, zero," Haslam said. "Net impact on our future, priceless."
Katie High, the vice president of Academic Affairs and Student Success for the UT system, said the "Tennessee Promise" program would have a "big, big" effect on non-traditional students, though she admitted that only time will tell the impact on incoming class sizes and average ACT scores.
"I think, at the Knoxville campus, you might see a small change," High said. "But we may see a larger change at UT-Chattanooga or Martin. But we may not."
High said it is important to understand that the "Promise" money will be "our last dollar spent." Students will only receive the money after consideration of their other financial aid, including federal money such as the Pell Grant and academic scholarships.
For many of the students targeted by Haslam's program, the price of four years at UT may not be much greater than the free cost of two years at a community college.
"There's still going to be a differential," High said. "But the differential may not be so great."
Another potential result of the initiative could be an increase in the number of transfer students into the UT system. In that event, High said she thinks the Knoxville campus has the capacity to take in those transfer students.
"We want to be prepared for it," High said.
Throughout his approximately 40-minute address, Haslam alluded to his Drive to 55 Initiative, a policy unveiled last year that aims to provide some form of higher education to 55 percent of Tennesseans by the year 2025. He said that only 32 percent of Tennessee citizens currently hold any form of secondary education.
Professing the economic benefits of a well-educated population, Haslam's "Promise" would seal Tennessee as the first state to offer free tuition to high school graduates.
Aside from $63 million earmarked for capital maintenance and $13 million designated for the Complete College Tennessee Act, which distributes funding to universities based on their number of graduates, Haslam mentioned no additional financing for traditional four-year universities.
In the 1 million Tennesseans with only a partial college education, Haslam asserted the existence of "untapped, unrealized potential." Citing the success of Erika Adams, a single mother who went back to complete her bachelor's degree in 2002, Haslam reported Adams is now working on her Ph.D. at Northeast State Technical Community College.
"This isn't just about higher education," Haslam said. "It's about better jobs for more Tennesseans."
Fiscal year 2015's biggest financial commitments will be toward education and TennCare, the health care program that has absorbed an increasing portion of the state budget at a rate of 3.5 percent annually.
Although Haslam praised the program as one of the best-managed in the state, he admitted that TennCare has increased to comprise more than 30 percent of the his budget, a significant rise from the low of 25 percent in 2009.
While state revenues have thus far fallen below expectations (collections from the state Franchise and Excise Tax are about 13 percent beneath predicted earnings), Haslam championed the state's recent tax cuts to the applause of legislators.
Assuring constituents that changes and cuts to the tax code will increase revenue over time, Haslam defended his stance on the state government's income, saying Tennessee has been ranked as the best place to retire.
"Tennessee is America at its best," Haslam said, "because we employ one of the best tax strategies of all time – common sense."