State senators approved a bill Thursday that would require the ailing New Mexico Lottery to provide $41 million a year for college scholarships, a move some opponents believe could leave less money for students.
The bill, which cleared the Senate 29-12, would change the fundamental structure of how lottery scholarships are funded.
Under current law, the lottery each month must pay at least 30 percent of the gross revenue from the previous month’s ticket sales to the state lottery tuition fund.
Pre-profit sales totals for scratcher tickets have declined from $91.4 million in 2007 to $69.8 million in 2014.
As a result, the lottery staff has sought a different formula so it can increase spending for advertising and promotions.
Sen. John Arthur Smith, D-Deming, sponsored the bill to remove the requirement of 30 percent of gross revenue going to scholarships. In turn, Sen. Daniel Ivey-Soto, D-Albuquerque, pushed through an amendment to the bill guaranteeing that $41 million a year would go to college scholarships.
Fred Nathan, executive director of Think New Mexico, a public policy organization, said the bill senators approved would actually help fewer people attend college.
“The 30 percent minimum requirement has resulted in an additional $9 million per year for scholarships, ensuring that the lottery achieves its statutory purpose of maximizing dollars to scholarships,” Nathan said. “The $41 million floor will become a ceiling because the lottery does not have an incentive to deliver one penny more to scholarships, even if lottery sales increase.”
The compromise brokered by Ivey-Soto drew support and opposition from fellow Democrats.
Sen. Mimi Stewart, D-Albuquerque, voted for the bill. “I think it’s important that we keep money coming into that fund,” she said.
A different view came from Sen. Bill Soules, D-Las Cruces, who voted against the bill. He said he opposes a government-sponsored campaign to increase sales of lottery tickets. “The lottery is an incredibly regressive way of funding scholarships,” Soules said. “An inordinate percentage of the tickets are bought by low-income people to pay for college scholarships of wealthier people.”
Smith’s bill now goes to the House of Representatives.