Copyright © 2019 Albuquerque Journal
The Senate Education Committee on Wednesday endorsed a proposal aimed at putting more scholarship money into the hands of New Mexico students.
The measure, Senate Bill 283, sponsored by Jacob Candelaria, D-Albuquerque, and John Arthur Smith, D-Deming, proposes to remove the mandate that New Mexico Lottery turn over 30 percent of gross sales and instead require it to transfer a minimum amount into the Legislative Lottery Scholarship program each year.
Lottery officials have backed similar proposals in recent years, asserting that the 30 percent mandate hurts sales by limiting the funds available for prizes. The 30 percent law, instituted in 2008, has resulted in scholarships receiving an average of about $42 million a year over the past five years, according to Lottery statistics.
Candelaria told committee members that he sat down with University of New Mexico and New Mexico State University students “to try to find a way to ensure that if we’re giving the Lottery some flexibility to drive up the dollar amounts coming into the fund, that we’re also protecting the students from having the rug pulled out from under them.”
Under the bill, the Lottery would transfer a minimum of $40 million to the scholarship fund in fiscal year 2020, increasing to $40.5 million in fiscal 2021 and $41 million in fiscal 2022 and subsequent fiscal years. The contribution to scholarships would revert to the 30 percent requirement if the Lottery were unable to fulfill its obligation, Candelaria said.
The bill would also set up a schedule restricting operating costs to no more than 17 percent of revenues in fiscal 2020, 16 percent of revenues in fiscal 2021 and 15 percent thereafter. The proposal defines operational costs as everything that is not prizes or transfers to the tuition fund. That includes vendor fees.
David Barden, CEO of the New Mexico Lottery, told the committee belt-tightening will be necessary to make work what he described as a new business model.
“We’ve looked at our business,” Barden said. “We’ve looked at other states. We don’t think we’re modeling other states when it comes to performance, so we do think that, with compromise, we can fulfill our obligation to the students. … This appears to be what we need to take the first step to show you that we can provide for students with a better business model.”
Fred Nathan, founder and executive director of the Santa Fe-based public policy think tank Think New Mexico, told the Journal the organization is ” heartened that the sponsor added the $41 million floor for students.”
“However, we still believe that the bill should also direct unclaimed prizes to scholarships,” Nathan said.
Since 1996, more than 117,000 students from across the state have attended New Mexico public colleges, universities and technical colleges with the assistance of Legislative Lottery Scholarship program. More than 66,000 of those students have already graduated from college, according to the lottery.
But the lottery’s contribution has varied through the years. It dropped to $37.8 million in 2017 from $46.3 million in 2016, a decrease of 18 percent. There was a recovery of sorts last year, however, with $40.2 million earmarked for scholarships.
The bill now goes to the Senate Finance Committee for consideration.