Lottery Scholarship bill up for debate

The Lottery Scholarship mandate is up for debate in the Roundhouse — again. 

New Mexico Senate Bill 283 passed the Senate Judiciary Committee Wednesday, encountering only a single dissenting vote, and now heads to the Senate floor. 

This bill is sponsored by Democratic State Senators Jacob Candelaria and John Arthur Smith, who also serves as Senate Finance Committee Chairman.

SB 283 would eliminate the 30 percent minimum of monthly gross revenue of the New Mexico Lottery that goes to the lottery tuition fund, and the Senate Education Committee amendment added payment goals. 

Here’s the breakdown of what the bill would do:

• The bill changes the amount of money and the pay schedule. No longer will it be monthly deposits that go into the lottery fund (run by the State Treasurer). The amount will change from “gross” to “net” (the difference between the total amount verses what’s left over). 
• Guarantee a transfer $40 million from revenues in fiscal year 2020. Increase to $40.5 million in FY 2021, and $41 million for “fiscal year 2022 and subsequent fiscal years.” 
• However, if the lottery does not meet the $41 million goal: the next year will revert back to the previous pay schedule of “not less than 30 percent of gross revenue.” 
• The final paragraph of the bill trims management, overhead and contracting costs by one percentage point a year. Overhead cannot exceed 17 percent of revenue in 2020, 16 percent in 2021 and cap at 15 percent from 2022 onward.  

Currently, of gross sales, the New Mexico Lottery sets aside 30 percent of yearly net revenue. This averages about $1,721.17 per student, per semester — since 2007, the average has been $42 million. 

This system means that if ticket sales are high, the Lottery Scholarship sees an increase (this also depends on a combination of tuition fees and enrollment numbers), but if sales drop, so does the fund.

The fund covered 100 percent of tuition until state legislators approved a decrease to 90 percent for the 2015-16 school year. In 2017, another decrease limited coverage to only 60 percent of tuition.

Debate first addressed SB 283’s name: “limiting the amount of revenue the New Mexico Lottery may expend for operational expenses,” which has been called “as deceptive as any I’ve seen” in an op-ed by Milan Simonich in the Santa Fe New Mexican.

Candelaria justified the bill’s title. 

“The reality is the drafters picked the titles, we didn’t,” Candelaria said. “There was no intent to defraud or mislead anybody.”

Candelaria, joined by the New Mexico Lottery’s CEO David Barden, said the lottery is being hampered by the required donation because they have to make their prizes smaller. 

“There’s no guarantee that the kids are going to win out, period,” Candelaria said. “We can stick with the 30 percent and the results it gives us or we can try something else and try growth and if it doesn’t work, we’ll go back to 30 percent.” 

Candelaria said if the measure does not work, the system will revert to the 30 percent requirement.

Sen. John White (R-Albuquerque) was the only dissenting vote on the finance committee. He said the bill is nearly identical to a 2018 measure, he feels it’s harder to understand this round. 

“The problem is, it’s still going $41 million dollars in the lottery fund and there’s no guarantee that’ll grow,” White said. 

White said he wants a commitment that the scholarship fund will see increases if sales increase. 

“If you’re going to be able to grow your gross sales, you oughta be able to grow the Lottery fund also, in the same proportion,” White said. “I understand you want to have more money for prizes, but it looks to me it comes at the expense of the scholarships.” 

The Associated Students of New Mexico State University Director of Governmental Affairs William Bradford, endorsed the bill. 

The Daily Lobo previously reported that Associated Students of UNM Governmental Affairs Director, Libertie Green, said her agency’s top priorities include opposing bills that would reduce or eliminate funding for the Lottery Scholarship.

ASUNM was not present at the committee hearing today, but Green said ASUNM President Becka Myers advocated for the implementation of the floor.

Green said the jump from 90 percent tuition covered to only 60 percent was harmful to students, and the bill now provides a range with the floor at $41 million. 

“After 2007 there was a lot of inconsistency, one year we only got $37 million,” Green said. “With the 30 percent (requirement) you’re always taking the chance that although you can get about $41 million, you can get significantly less.” 

A nearly-identical measure was tabled on the Senate floor after passing committees and a floor vote on the House side. 

Danielle Prokop is a senior reporter at the Daily Lobo. She can be contacted by email news@dailylobo.com or on Twitter @ProkopDani.