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State hopes to avoid scholarship cuts in spring

SANTA FE, N.M. (AP) — Gov. Susana Martinez’s administration said Monday it wants to avoid cuts in a lottery-financed college scholarship program this spring by having the Legislature shore up the program temporarily with general tax revenues.

Higher Education Secretary Jose Garcia said in a letter to colleges and universities that scholarship awards, which fully cover tuition for eligible students, will be reduced if lawmakers fail to plug a financial shortfall in the program. The Legislature convenes in January for a 30-day session.

The administration estimates the Legislature may need to allocate $15 million to $20 million to cover scholarship costs this year.

The lottery will provide about $40 million for the program. However, rising tuition and student demand for scholarships have outstripped growth in lottery revenues since the program was created in 1996.

Garcia said the Legislature should plug this year’s shortfall with money from the state’s general budget account and revamp the program to keep it from running out of money in the future.

“We remain hopeful that our lawmakers will understand the urgency of this very pressing matter and act accordingly,” Garcia wrote. “We believe it’s reasonable to appropriate general funds to cover the spring shortfall, and enact reasonable, balanced reforms to the scholarship so that students can receive predictable funding next school year and beyond.”

If no action is taken by the Legislature, state law requires scholarships to be cut to an amount less than 100 percent of tuition to keep the program solvent within available revenue.

Sen. John Arthur Smith, a Deming Democrat and vice chairman of the Legislative Finance Committee, said he agreed lawmakers should protect current scholarship recipients from cuts in their stipends.

“I just want to hold them harmless because it’s not fair to that group,” Smith said in an interview.

The state has adequate cash reserves to provide supplemental money for the program this year, he said.

To qualify for a scholarship currently, New Mexico students must enroll in a public college or university in the state after graduating from high school, attend full time and maintain a 2.5 point grade point average. About 15,000 students received scholarships this fall.

A state task force studied possible changes in the program earlier this year but couldn’t reach an agreement on how to restructure the scholarships. The Legislature must approve any changes. One possibility is to provide students with a flat dollar amount as a scholarship rather than tying stipends to tuition. Other proposals include raising the minimum grade point average to make it more of a merit-based scholarship, require students to take 15 credit hours a semester rather than current 12 hours and lower the number of semesters a student is eligible for a scholarship from eight to seven.

“Fixes have to be made,” Smith said. “It has to be indexed off of something other than tuition.”

The Martinez administration generally opposes earmarking a new permanent source of revenue for the scholarships as a way of keeping the program solvent in the future, according to Tom Clifford, secretary of the Department of Finance and Administration.