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By: Jon Styf, The Center Square

A bill that would ultimately take $54 million worth of annual sports gambling taxes and spend it on child care scholarships passed a Senate committee despite the objection of two Republican lawmakers who believe funding child care is beyond the scope of government.

The bill would create a Promising Futures Account with Tennessee’s treasury and begin by giving up to $4,500 in scholarships for approved early childhood learning programs.

Senate Bill 750, which came with an amendment that does not yet have its own fiscal note, will next go to the Senate Finance, Ways and Means Committee after passing the Senate Education Committee by a 7-2 vote.

The state’s sports wagering law requires 80% of the privilege tax each year to be used for education. It currently goes into an account used for Tennessee’s Promise and Hope scholarships.

Lou Hanemann, chief of staff of the Tennessee Higher Education Commission, said that amount of funding being diverted elsewhere would be “devastating” to the fund.

“This is not a reserve account where moneys are kind of hanging out,” Hanemann said.

Sen. Becky Massey, R-Knoxville, said she believed the program would have a lasting impact as it improved early learning and literacy along with social readiness. She said that child care costs in Tennessee are often higher than college tuition.

The original bill had a fiscal note saying that $40.8 million would go into the new account next fiscal year, followed by $47.6 million in 2024-25 and $54.4 million in 2025-26. It would be a last-dollar scholarship that would be awarded if a family met the income requirements – making less than the state median income – and had first applied for federal financial aid.

The program would begin July 1, 2024.

Tennessee collected $68 million in privilege taxes from sports wagering in 2022.

“This bill will have a double bottom line because it will strengthen our workforce for today and our workforce for the future,” Massey said

Committee Chairman Jon Lundberg agreed child care was not part of the state’s constitution and therefore voted against the bill. Sen. Todd Gardenhire, R-Chattanooga, asked Massey and Tennesseans for Quality Early Education Chief Executive Officer Blair Taylor to promise not to come back to the committee and ask for more funding for the program over the next three years.