The Senate Education Committee on Monday unanimously voted to approve a bill to use unclaimed lottery prize money to shore up the state’s Legislative Lottery Scholarship fund.
Senate Majority Leader Michael Sanchez, D-Belen, introduced Senate Bill 79, which would transfer forfeited prizes to the lottery tuition fund that has been feeling the effects of stagnant ticket sales. Currently there is about $1 million in the unclaimed prize pool, which the New Mexico Lottery Authority uses to enhance prize payouts, fund specialty games and other purposes.
New Mexico Lottery Authority CEO David Barden warned that unclaimed prize money is “unpredictable “and thus “not a reliable source” of funding for any project. While stopping short of saying he opposes the bill, Barden said, “the reality is that the long-term results may actually reduce the actual dollars transferred to the tuition fund.”
Sanchez introduced a similar bill last year but, as he told the Senate Education Committee, “It got lost in the House [of Representatives].”
Several people in the committee room on Monday spoke in favor of the bill, including a woman who told the committee members that the bill won’t “cost the state anything because people didn’t pick up their prizes.”
Wendy Ahlm, spokeswoman for the New Mexico Lottery, said all lottery game prizes must be claimed within 90 days from the date of the drawing. While she said there is now about $1.1 million in the lottery’s unclaimed prize pool, the annual average over the past five years has been $2.85 million, according to a legislative report. Ahlm said she could not say with certainty why some people don’t pick up their prizes, but said it is possible players lose their tickets, do not check them or don’t cash them in on time.
Sanchez’s bill is one of two designed to help the struggling Legislative Lottery Scholarship fund, which gets 30 percent of proceeds from lottery ticket sales to pay for in-state college tuition for eligible students.
Sen. John Arthur Smith, D-Deming and chair of the Senate Finance Committee, introduced Senate Bill 230 this session to delay the sunset of distributions to the scholarship fund from the state’s liquor excise tax and phase down the percentage distribution.
The liquor excise tax contribution will end in 2017 unless Smith’s bill — which extends the distributions through 2020 — is approved and signed by the governor.
Smith also introduced SB 180, which eliminates the requirement that a minimum of 30 percent of lottery revenues go to the scholarship and instead mandates that all prizes, expenses and overheard first get paid out before any money goes into the scholarship. That bill has yet to get a hearing date before any committee.
The scholarship fund’s sustainability has been a subject of concern for years because rising student enrollment and tuition costs started to outpace lottery revenue. The take from ticket sales has stalled at around the $40 million mark, while the demand for scholarship money has risen to around $64 million.
The 20-year-old scholarship fund once covered 100 percent of tuition for in-state students who met eligibility requirements, but that amount dropped to 95 percent in the 2014-15 school year and to 90 percent in the current school year. It would have dropped even lower if lawmakers hadn’t decided to draw on the state’s general fund and alcohol excise tax revenue to supplement the scholarships.
A third bill related to the Legislative Lottery Scholarship fund this year came from Sen. Bill Soules, D-Las Cruces. It would have no financial bearing on the solvency of the fund but would open up eligibility to New Mexico high school graduates who take up to 18 months before going to college. Current lottery scholarship rules require high school graduates to go to college within one semester of graduating. That bill has not yet been heard in this 30-day session.
Sanchez’s bill will next move on to the Senate Finance Committee.
Contact Robert Nott at 986-3021 or [email protected].