New Mexico House approves financial fix for tuition scholarships

The measure, approved 57-10 and sent to the Senate on Tuesday, would earmark all state lottery proceeds for the scholarship program. Any surplus after covering scholarship awards would go to help finance school construction projects.

The scholarship program currently receives 40 percent of lottery profits each year, while 60 percent is used for public school construction.

The scholarships pay 100 percent of tuition for New Mexico students who graduate from high school, immediately enroll in college and maintain a 2.5 grade point average.

However, demand for the scholarships is outrunning the financing. The program is projected to have a $2.7 million shortfall next year. That will grow to $17 million in the 2001-2002 budget year under the current 40-60 split of lottery proceeds, according to the Commission on Higher Education.

If the financing isn't supplemented, the commission says it will have to reduce the scholarships to about 70 percent of tuition next school year.

If 100 percent of lottery proceeds go to the program, it's projected to meet scholarship needs through the 2005-2006 budget year.

The House bill also would change the name of the scholarships to "legislative lottery tuition scholarships."

The House measure would require schools to award qualifying students any other available financial aid before granting them lottery tuition scholarships.

Supporters say the change will protect the long-term financing of the program by ensuring that the lottery-funded awards don't supplant federal student aid and other scholarships a student could otherwise receive.

The House-passed bill is one of several proposals under consideration to shore up the scholarship program.

The Senate, for example, has approved a measure to allow more slot machines at horse racing tracks and use the extra tax revenues for the scholarships.

Another Senate-passed bill would offer a short-term financial fix by changing the revenue split from the lottery to 50-50 between scholarships and public school construction.

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