Haslam’s college-for-free offends free market, is not a real liberty

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Gov. Bill Haslam receive applause from legislators after a Feb. 3, 2014, speech in Nashville.

Gov. Bill Haslam receive applause from legislators after a Feb. 3, 2014, speech in Nashville.

By David Tulis

Gov. Bill Haslam’s plan to give away two years of community college schooling at state expense smells of good intentions disconnected to marketplace principles that bring overall prosperity.

His Tennessee Promise program subsidizes two years of class at community colleges or colleges of applied technology that he says would come from the state’s lottery company. “I propose that we transfer lottery reserve funds into the endowment, which is strategically redirecting existing resources,” he says.

Gov. Haslam makes no estimate how costly the entitlement will become, but says only that F$110 million will be left in the lottery account once money is siphoned off for the endowment. How big is this proposed endowment? Unknown to the public. The lottery fund balance at the end of 2013 was F$399.7 million but its net financial position was enough to buy a used Toyota Camry. Also left obscure in the talk is the size of the Haslam budget (F$32.6 billion, according to newspaper reports).

The principles of liberty he offends is that he creates an expectation in the citizenry as to what is theirs. A freebie program can’t be easily cut or killed once people draw from it for an ostensible public benefit. Free college for two years becomes an entitlement; at the very least citizens have procedural rights to the money, though perhaps not substantive ones, it being a mere political favor. Dependence. That’s what state government proposes to create.

Whatever the state subsidizes, of that it gets more. Giving away college demeans the value of it. I doubt Gov. Haslam’s plan in “higher education” is attuned to the devastation the university concept faces from the Internet, where Ivy League schools give away their content and YouTube can become the lecture hall for any slightly motivated parent or student. In an era of decentralization via digital technology, how can centralized school systems and capital-intensive universities survive in their current form? Perhaps two years at Chatt State really is as worth as little as Tennessee Promise suggests. Yet expenses from that system persist.

“Net cost to the state, zero,” Gov. Haslam averred. “Net impact on our future, priceless.” The state’s chief executive is being disingenuous in these claims.

Lottery fund depleted

The lottery has F$86.1 million in cash, F$65 million due from primary government, F$2.7 million in investments and total assets of F$162.8 million. It has, at 2013’s end, F$162.79 million in liabilities. Its net position is F$7,000, according to the state’s 2013 comprehensive annual financial report (Page 188). Yanking F$100 million from the lottery won’t show up until next year’s CAFR.

It paid $794.38 million in prizes to a grateful public seeking to live free.

Sources: 2013 Tennessee CAFR, “State of the state” speech transcript from the governor’s office

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