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Lottery scholarship panel ends without a solvency plan

SANTA FE – A task force charged with finding ways to prop up New Mexico’s cash-strapped legislative lottery scholarship held its last meeting Friday without reaching agreement on solvency plans.

The lack of task force recommendations means the scholarship’s money troubles will likely be subject to wide-open debate when the Legislature convenes in January.

The lottery fund is struggling to keep up with rising tuition and increased use: Roughly 13,600 university students had their tuition covered by the scholarship in 2010. Higher Education Secretary José Garcia has said scholarships might have to be scaled back, possibly starting next year, if a solvency fix is not adopted during the 2014 legislative session.

Proposals to increase eligibility requirements or reduce the number of semesters a student could receive the scholarship got a tepid reception Friday from university officials, lawmakers, student leaders and other task force members.

In fact, none of the recommendations was unanimously backed, and most drew more opposition than support.

Garcia, who served as the task force’s co-chairman, acknowledged the difficulty of finding common ground.

“This is complicated, it’s difficult and there are different philosophical ways to approach this,” he said at the end of Friday’s meeting. “We’re never going to find consensus.”

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.

Although the stakes will be higher during the coming 30-day session, due to the possibility of scholarship cuts, some lawmakers said familiar stumbling blocks await.

“This feels a lot like last session,” Rep. Dennis Roch, R-Logan, said during Friday’s hearing.

Senate Majority Leader Michael Sanchez, D-Belen, the other co-chairman of the task force, said Friday that he’s in favor of finding new ways to fund the scholarship program and will oppose “punitive” attempts to scale back scholarships or increase eligibility guidelines.

He cited several possible new funding sources during Friday’s meeting, such as tribal gaming revenue and earmarked tax hikes, as possible solutions.

“If we truly believe we want these kids to graduate from college, we should look at every possible revenue source,” Sanchez said.

However, Gov. Susana Martinez has vowed to veto any tax increase during her four-year term as governor, and her stance would appear to complicate efforts to prop up the scholarship program with new money sources.

Garcia alluded to that Friday, saying, “The governor has wisely stated that (tax increases) are not a viable long-term solution.”

The lottery scholarship, created in 1996, is 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, though other fees are not covered.

The lottery fund’s solvency crunch has been growing steadily in recent years, due to rising tuition costs and largely stagnant lottery ticket sales, among other factors. This year, the lottery fund is expected to pay out $67 million in scholarships while only taking in about $40 million in revenue, Garcia said.

Eastern New Mexico University President Steven Gamble, a task force member, said some type of action will have to be taken.

“Unless we can come up with a new revenue stream, we’ve got to make cuts,” Gamble said Friday.

Specific proposals considered Friday included:

  • Raising the minimum GPA to receive the scholarship from 2.5 to 2.75.
  • Requiring at least 15 credit hours per semester, instead of the current 12 credit hours.
  • Decreasing the number of semesters a student can receive the scholarship from eight to seven.
  • Making the scholarship a flat dollar amount, instead of tying it to tuition.

Of those proposals, only the GPA change received majority support from task force members, although that support was not unanimous.

Meanwhile, none of the possible tax hikes or new funding ideas were voted upon Friday.

The 2014 legislative session will begin Jan. 21.