Senate approves slot machine expansion for scholarships

Barry Massey

Sunday, Feb. 13, 2000 | 8:54 a.m.

SANTA FE - Horse racing tracks could operate more slot machines and the extra tax revenues would help shore up a college scholarship program under legislation approved by the Senate on Saturday.

The bill by Sen. Michael Sanchez, D-Belen, would permit tracks to have an additional 200 slot machines for a total of 500.

The extra gambling is projected to provide an additional $9 million in yearly tax payments for the state's lottery scholarship program. Currently, 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.

"You couldn't find a better funding mechanism for the scholarships than the lottery and gaming," said Sen. Roman Maes, D-Santa Fe.

But opponents disagreed.

"This is pretty amazing that we're increasing gambling for the sake of scholarships," said Sen. Richard Romero, D-Albuquerque. "It's like apple pie, the American flag. It seems like it's real wholesome, but it's an expansion of gambling again."

Several critics said the Legislature should focus on finding more monies for public school construction rather than the lottery scholarship program.

The Senate passed the bill 23-11 and sent it to the House for consideration.

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

But the program is projected to have a $2.7 million shortfall next year and 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 in the next school year.

However, several senators complained that the commission hasn't adequately tracked lottery scholarship students to accurately predict how much money will be needed in the future.

More than 8,000 students were getting the scholarships last spring and that's expected to grow to about 14,000 in the current school year.

Also on Saturday, a House committee approved a proposal for a long-term solution to the scholarship program's financial problems.

The Appropriations and Finance Committee unanimously endorsed a measure that would allocate 100 percent of lottery proceeds to the scholarship program. That's projected to fully cover the financial needs of the program through at least the 2005-2006 budget year. The bill goes to the House floor for consideration.

On Friday, the Senate approved a short-term financial fix for the program to ensure that scholarships continue paying 100 percent of college tuition through the next school year.

That bill, also sponsored by Sanchez, would change the revenue split from the lottery to 50-50 between scholarships and public school construction. If that occurred, commission says the program would face a shortfall of about $13 million in the 2001-2002 budget year.