The House Ways and Means Committee has killed a bill that would have required the New Mexico Lottery to provide $41 million a year to a stagnant fund for college scholarships.
The committee voted 8-5 against Senate Bill 180 on Wednesday, with two Democratic lawmakers joining Republicans in voting against the bill and one Republican crossing party lines to vote for it.
Their action effectively leaves the struggling scholarship program without any means to shore it up until next year’s legislative session.
“It’s one of the bills where the proof of the pudding is in the tasting, and I guess we’re going to have to taste it — a bitter taste — once it starts to decline in what the lottery contributes to the scholarship fund,” said Sen. John Arthur Smith, D-Deming.
Smith introduced the bill, which would have removed requirement that the New Mexico Lottery give 30 percent of its gross revenue to the scholarship fund, though Sen. Daniel Ivey-Soto, D-Albuquerque, introduced an amendment guaranteeing that a minimum of $41 million a year would go to college scholarships.
The bill, which cleared the Senate last week by a vote of 29-12, would have altered the framework of the fund. Under current law, each month the lottery must pay at least 30 percent of the gross revenue from the previous month’s ticket sales to the state’s Legislative Lottery Scholarship program. Smith’s bill would have allowed the lottery to spend more money on advertising and promotion, with an eye toward offering bigger prizes and attracting more players — and, in turn, collecting more money for scholarships.
Some critics, including several members of the House Ways and Means Committee, said they were concerned that language in the bill regarding “lottery gaming systems” would lead to the scholarship fund collecting proceeds from video bingo, video poker and other types of gaming, and lead to more gambling in the state.
On Thursday, Smith said he didn’t buy that argument: “That door has already been open.”
Fred Nathan, executive director of the Santa Fe-based Think New Mexico, opposed the bill, saying it ultimately would provide less scholarship money for students. “Senate Bill 180 was lose-lose for New Mexico: it would have had the effect of expanding gambling while reducing the dollars going to scholarships,” he said in an email Thursday.
Over the past eight years or so, lottery ticket sales have stalled while need for the lottery scholarship fund has grown.
While the scholarship once covered 100 percent of tuition, 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 drawn on the state’s general fund and alcohol excise tax revenue to supplement the lottery fund. That liquor excise tax contribution will end in 2017, adding more stress to the scholarship fund.
But some hope for the fund came in a Thursday Senate floor vote, 35-4, to support a bill that would funnel $6 million to $9 million in unclaimed lottery prize money into the scholarship fund. That bill, sponsored by Senate Majority Leader Michael Sanchez, D-Belen, still has to make it through the House of Representatives.
Contact Robert Nott at (505) 986-3021 or [email protected].