New Mexico’s Legislative Lottery Scholarship program may run out of money in 2014, according to the state’s Legislative Finance Committee. Several legislators have submitted proposals for shoring up the solvency of this program, which would change its funding and eligibility.
In 2012 the state spent $58 million on lottery scholarships for 21,000 students, up from $40 million five years ago. These scholarships pay 100% of student tuition, for eight consecutive semesters, at 25 public colleges and universities in New Mexico
The LFC’s 2014 Budget Recommendations cite “relatively flat lottery revenues” and “steadily increasing tuition levels” as reasons for recent declines in the lottery scholarship fund. The LFC projects the state will not have enough money for spring 2014 awards.
“The projected annual shortfall is an estimated $5 million,” the LFC reported three weeks ago.
Senate Bill 392 from State Sen. Michael Sanchez, D-Valencia, would fund this $5 million gap. This bill would claim 25% of the $20 million that the state expects to transfer annually from the tobacco permanent fund into state programs.
State Sen. Tim Keller, D-Bernalillo, told the Daily Lobo that Democratic leaders in the legislature “are looking to freeze the amount a student receives from the scholarship each year.” This shift could “make universities think twice before instituting tuition hikes.”
State Rep. James White, R-Bernalillo, introduced House Bill 309 to cut costs in the lottery scholarship program. His will would pay for as little as 40% of tuition costs at four-year universities. Community college students would still get 100%.
An extra $7 million in New Mexico lottery ticket sales, which the state reported last week, has probably increased the desire of some state legislators to expand eligibility for lottery scholarships. Currently 30% of these ticket sales fund lottery scholarships.
State Rep. Sheryl Williams Stapleton, D-Bernalillo, in House Bill 27, would change the lottery scholarship, so students no longer have to enroll in the first college semester following their graduation, but can take a year or two off from school.
Students at tribal colleges in New Mexico could become eligible for state lottery scholarships, if House Bill 28 from State Rep. Eliseo Alcon, D-Cibola, becomes law. Navajo Nation President Ben Shelly asked state legislators on Friday to support this measure.
A UNM Regents survey in December about the lottery scholarship found over 40% favored raising the 2.5 GPA that lottery scholarship recipients currently have to maintain. Fewer respondents supported making the scholarship income-based or reducing the amount of tuition covered.
A summit at UNM the previous month revealed that more than half of the New Mexico students who receive lottery scholarships come from families whose annual income exceeds $100,000.
State Rep. White’s bill would require students to take at least 15 credits per semester, which arguably could boost graduation rates. The UNM Regents survey found some support for keeping the current lottery scholarship requirement at 12 credits each semester.
Students would receive the lottery scholarship for a maximum of seven semesters, rather than the current eight, if State Rep. White’s bill becomes law. Each of the requirements in his bill would take effect in the fall 2013 semester.
The Albuquerque Journal Editorial Board has advocated for “requiring students to take remedial coursework at less-expensive community colleges.” State Rep. White told the Albuquerque Journal his bill would “encourage students who need remedial courses to start out at community colleges.”
Since the program started in 1996, according to nmlottery.com, over 82,600 students have attended New Mexico colleges and universities with financial assistance from a lottery scholarship.