When Alcohol Funding Dries Up: Scholarship Program Faces Its Future

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January 18, 2016; Albuquerque Journal

The New Mexico Lottery Scholarship, already shrinking in scope over the past decade, may lose a chunk of its funding when a 2014 expansion of the program expires at the end of next year.

New Mexico’s Legislative Lottery Scholarship Program was set up in 1995 in conjunction with the establishment of the lottery. At that time, according to the Albuquerque Journal, the state’s legislature reserved 40 percent of the lottery’s profits for full scholarships to be offered to all New Mexico high school students immediately enrolling in in-state colleges upon graduation. Students could continuously renew the scholarship by enrolling in a course load of at least 12 semester hours and maintaining a grade point average of 2.5 or higher. (The course load has since been raised to 15 hours.)

However, the demand for college tuition monies eventually surpassed the allocated percentage of lottery profits, so in 2001, New Mexico’s legislature allocated the full 100 percent of the lottery’s profits to the scholarship program. Scholarships slipped from covering full tuition to covering about 95 percent of each recipient’s tuition by 2014, as projections for lottery income were dwarfed by tuition needs.

In that year, legislators voted to add additional funding to the lottery scholarship, using about $19 million obtained through the state’s alcohol tax, through 2018. Some lawmakers have voiced their intention not to renew the alcohol tax funding of the scholarship, stating that such excise taxes were intended to be used for DWI-prevention programs.

This year, recipients can expect the scholarships to cover about 90 percent of tuition. The Albuquerque Journal reports that, if the alcohol tax funding is removed from the program, recipients will see about coverage of about 60 percent.

Some lawmakers have cited rising tuition costs, along with a higher number of enrollees, as major components in the lottery scholarship’s path to insolvency. While New Mexico’s lottery scholarship program is unique, its struggle to keep up with rising tuition costs is not. According to the Urban Institute, the average cost of tuition and fees at American four-year public colleges has increased by 44 percent between the 2004-05 academic year and the 2014-15 year.—Lauren Karch