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

SPONSOR:	Varela		DATE TYPED:	02/11/99		HB	81
SHORT TITLE:		Lottery Revenue For Education Technology				SB
					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.	$ (9.9)		Recurring	School Capital
N.A.	$ 3.3		Recurring	Lottery Tuition
N.A.	$ 6.6		Recurring	Ed. Technology

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to HB-9, HB-258, SB14, SB126, SB-252

Synopsis of Bill

House Bill 81 proposes to change the distribution of lottery net revenues. Under current law, 60 percent of lottery revenues are distributed to the public school capital outlay fund and 40 percent to the lottery tuition fund. The bill would increase the distribution to the lottery tuition fund from the current 40 percent to 60 percent. The remaining 40 percent would be distributed to the educational technology fund. Educational technology fund revenues would be distributed to each school district in the state based their share of total student enrollment. The distribution to the school capital outlay fund is eliminated.

The bill also would require the lottery to provide a copy of their proposed annual operating budget for the following fiscal year by September 1. Currently, the Lottery is required to provide their proposed budget by an unstated date in December for informational purposes. The budget proposal would include estimates of revenues available for the educational technology and lottery tuition fund . Presumably, the proposed change would allow interim legislative committees more time for budget planning.

The proposed changes would become effective in FY 2000.

FISCAL IMPLICATIONS

The New Mexico Lottery Authority's FY 2000 revenue estimate is $93.5 million, with $16.5 million in net revenue available for distribution to the state. The proposed distributional changes are shown in the following table.

FUND	FY 2000 CURRENT LAW	FY 2000 BILL PROPOSAL	FY 2000 DIFFERENCE
School Capital	$9.9	$0.0	(-9.9)
Lottery Tuition	$6.6	$9.9	$3.3
Educational Technology	$0.0	$ 6.6	$6.6
Total	$16.5	$16.5	$0.0

OTHER SUBSTANTIVE ISSUES

The State Department of Education reports that the removal of public school capital outlay as a beneficiary of lottery revenues would reduce a large share of the dollars that they have available to help districts with critical capital outlay needs.

The Commission on Higher Education reports that if the distributions to the lottery tuition fund are not increased, they may have to reduce the amount of scholarship awards by FY 2001. The proposed increase in distribution to the tuition fund will allow them to continue providing 100 percent scholarships at least through 2001, they say.

BT/njw