Master FIR (1988)

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F I S C A L I M P A C T R E P O R T

SPONSOR:	Kidd		DATE TYPED:	02/06/99		HB
SHORT TITLE:		Lottery Revenue Distribution				SB	126
					ANALYST:		Taylor

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY99	FY2000	Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
N.A.	$ (9,900.0)	$ (9,900.0)	Recurring	Public School Capital Outlay
N.A.	$ 9,900.0	$ 9,900.0	Recurring	Lottery Tuition

(Parenthesis ( ) Indicate Revenue Decreases)

Relates to HB9, HB23, HB81, HB258, SB9, SB13, Sb14, Sb126 and SB240

SOURCES OF INFORMATION

Commission on Higher Education

State Department of Education

Legislative Finance Committee Files

SUMMARY

Synopsis of Bill

Senate Bill 126 would direct all net lottery revenues to the tuition scholarship fund. Revenues are currently shared between the tuition scholarship fund and the public school capital outlay fund, with the scholarship fund receiving 40 percent of revenue and capital outlay 60 percent. The bill also repeals the sunset provision governing the distribution of revenues. Absent the repeal of the sunset provision, all net lottery revenue would flow to the state general fund.

FISCAL IMPLICATIONS

The New Mexico Lottery Authority has estimated that net revenues for FY2000 will be $16.5 million. Under current law (and assuming that the sunset provision is repealed), the public school capital outlay fund would receive 60 percent or $9.9 million. Thus, directing all revenue to the tuition program has the effect of decreasing school capital outlay by $9.9 million and increasing lottery tuition scholarship revenues by the same amount.

ADMINISTRATIVE IMPLICATIONS

Neither the CHE nor the SDE report significant administrative impacts.

OTHER SUBSTANTIVE ISSUES

The SDE reports that school capital outlay funds are scarce and needed to build new classrooms and renovate existing classrooms. In many cases, the renovations are necessary to address safety, building code compliance and overcrowding issues. In 1998, the Public School Capital Outlay Council received $135 million priority requests, but had only $13 million to award.

The CHE reports that based on the Lottery's revenue estimates and projections as to the number of students eligible for lottery scholarships, they will run short of funds by FY2001. Providing a 100 percent distribution to the tuition program will provide sufficient funds for the program until FY 2006.

There is considerable uncertainty as to both estimates on lottery revenues and estimates on demands for lottery scholarships. This may suggest that incremental changes in the distributions would be prudent.

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