SANTA FE – New Mexico’s cash-strapped legislative lottery scholarship fund has enough money to keep paying the full tuition costs of all qualifying in-state students – at least for now.
However, scholarships could be scaled back as soon as next year if a solvency fix is not approved during next year’s 30-day legislative session, Higher Education Secretary José Garcia said in a recent letter to university and community college presidents.
“It is imperative the Legislature take swift action during the 2014 legislative session to avoid what could be a dramatic reduction in the amount awarded to all students who qualify for the lottery scholarship,” Garcia said in his letter.
In an attempt to avoid scaled-back scholarships, a task force consisting of lawmakers, students and university leaders is studying possible changes to the lottery fund. The group has already held one meeting and is scheduled to meet again next month.
Senate Majority Leader Michael Sanchez, a Belen Democrat who is co-chairing the task force with Garcia, said he is optimistic the members will be able to come up with a solvency proposal that could be taken to the Legislature.
However, Sanchez said he is not in favor of trimming the scholarship program or enacting new eligibility guidelines.
“I’ve said from the beginning I’m not interested in punitive solutions,” he told the Journal.
The lottery fund is struggling because college tuition rates have increased while lottery revenues have remained largely flat. In 2012, for example, the lottery fund paid out more than $58 million in scholarships while taking in only $41 million in revenues.
A report issued this month by New Mexico Voices for Children concluded that to keep the lottery scholarship fund from going broke, the program should be limited to students with high financial need.
The report also noted that the total number of students receiving lottery scholarships has grown from 7,377 in fall 2000 to 13,619 in fall 2010.
Sanchez, who called the lottery scholarship a “victim of its own success,” said other revenue sources could be used to bolster the fund, in addition to lottery ticket sales. He suggested one new source could be tribal gaming revenues, which could lead to the lottery scholarship being expanded to include tribal colleges.
The lottery scholarship, created in 1996, is currently available to any New Mexican who graduates from an in-state high school with a minimum 2.5 GPA. Students who receive a New Mexico GED are also eligible. Those who receive the scholarship have 100 percent of their tuition covered for eight consecutive semesters.
In his letter, Higher Education Secretary Garcia urged university and community college presidents to let qualifying students know about the status of the lottery scholarship fund and the importance of solvency legislation.
During the 2013 legislative session, several bills aiming to make sweeping changes to the scholarship program – by changing eligibility or trimming how much money students receive – failed to pass the Legislature.
Lawmakers did pass a measure, eventually signed into law by Gov. Susana Martinez, that transferred $10 million into the lottery scholarship fund from the state’s tobacco settlement fund.
However, that measure was largely seen as a stopgap approach to temporarily shore up the fund.