A bill signed by New Mexico Gov. Bill Richardson on Thursday is designed to extend the life of the lottery scholarship fund, which has been projected to run out of money in the next few years.
Senate Bill 364, sponsored by Senate Majority Leader Michael Sanchez, D-Belen, will require that more money from lottery sales goes to the scholarship fund, and less to administration.
The lottery scholarship allows all New Mexico high school graduates in good academic standing to attend college in state without having to pay tuition. A report last year by the Higher Education Department projected that, at the current rate of usage, the fund could be depleted by 2011.
"It's difficult to predict, but we think this legislation has sort of pushed out that day of reckoning by about 14 years," said Fred Nathan, executive director of the public policy group Think New Mexico, which put out a report last year showing New Mexico's administrative costs for its lottery program were among the highest in the nation.
"So that means that even a full-day kindergarten student can count on this scholarship," Nathan said.
The bill will require that at least 27 percent of all lottery revenue go toward scholarships through the end of 2008, when the requirement will increase to 30 percent. Current law already requires that at least 50 percent go toward prizes.
The total now going to scholarships is 23.97 percent, and was projected by the Lottery Authority to drop to 22.07 percent by 2010, according to the Think New Mexico report.
The Lottery Authority originally opposed the bill, going so far as to hire a lobbyist. That decision was quickly nixed by Richardson, who said he thinks the authority can adapt to the changes.
"They're going to have to find ways to cut costs and cut administration," Richardson said. "They have a year to do it."
Richardson said if this change does not ensure the fund's solvency, he would be open to other steps.
"Right now we believe that this shift will put more money for scholarships, but as we look to the future, the state is luckily in good financial shape. So, just like we started the scholarship fund, if necessary, with the support of the Legislature, we'll replenish this fund."
Michael Martin, president of New Mexico State University, said the lottery bill should be seen within a bigger picture of "making the system excellent while making it accessible."