Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports
if they are used for other purposes.
Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).
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attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.
F I S C A L I M P A C T R E P O R T
SPONSOR Gonzales DATE TYPED 03/15/05 HB 119/aHEC/aHAFC/aHFl#1/aHFl#2
SHORT TITLE
Lottery Scholarship Eligibility
Expansion
SB
ANALYST Williams
APPROPRIATION
Appropriation Contained Estimated Additional Impact Recurring
or Non-Rec
Fund
Affected
FY05
FY06
FY05
FY06
$1,200.0 -
$1,600.0
Recurring (with
escalation over
time)
Lottery Tuition
Scholarship Fund –
two year eligibility
window
$89.4 - $837.0
* see text
Recurring (with
escalation over
time)
Lottery Tuition
Scholarship Fund -
expansion to NM
regionally accredited
tribal colleges
Minimal Recurring (with
escalation over
time)
Lottery Tuition
Scholarship Fund –
resident United States
Armed forces
temporarily assigned
out-of-state
Minimal Recurring (with
escalation over
time)
Lottery Tuition
Scholarship Fund –
resident federal and
state employees
temporarily assigned
out-of-state
Minimal Recurring (with
escalation over
time)
Lottery Tuition
Scholarship Fund –
resident tribal
employee temporarily
assigned out-of-state
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to numerous student financial aid and lottery scholarship bills
SOURCES OF INFORMATION
LFC Files
pg_0002
House Bill 119/aHEC/aHAFC/aHFl#1/aHFl#2
New Mexico Lottery Authority
Commission on Higher Education (CHE)
SUMMARY
House Floor Amendment #2
The House Floor Amendment #2 makes significant expansions to eligibility for the lottery tuition
scholarship program.
•
Expand eligibility for eligible students attending regionally accredited tribal colleges
located in New Mexico (related to House Bill 551)
•
Expand eligibility for lottery tuition scholarships to include qualifying students who are
dependents of New Mexico residents stationed outside of New Mexico due to service in
the United States armed forces. These students may qualify by completing a high school
curriculum at any public or private accredited high school or receiving a graduate
equivalent diploma, then attending a qualifying New Mexico educational institution. The
bill limits the authorization to eligible New Mexico residents paying New Mexico income
taxes (related to House Bill 554);
•
Expand eligibility to students whose parents are employed by state and federal
government and are temporarily working out-of-state, but New Mexico residency is
maintained and the family continues to file New Mexico personal income tax;
•
Expand eligibility to students whose parents are employed by tribal government and are
temporarily working out-of-state, but New Mexico residency is maintained and the
family continues to file New Mexico personal income tax (see significant issues);
o
In each of these cases, the students completed high school out-of-state because of
the parent’s work assignment.
House Floor Amendment #1
The House Floor Amendment #1 removes the House Appropriations and Finance Committee
amendment and the first House Education Committee amendment. Further, the House Floor
Amendment #1 restores a 24 month eligibility window between high school graduation (or GED
receipt) and enrollment in a qualifying post-secondary institution.
Summary of HAFC Amendment
The House Appropriations and Finance Committee amendment strikes the House Education
Committee amendment and changes the windows of eligibility for a lottery tuition scholarship to
post-secondary enrollment within 18 months of high school graduation (or GED receipt).
Summary of HEC Amendment
The House Education Committee amendment makes a clarifying statutory change to authorize
the two-year eligibility window.
Synopsis of Original Bill
Endorsed by the Legislative Education Study Committee.
pg_0003
House Bill 119/aHEC/aHAFC/aHFl#1/aHFl#2
House Bill 119 authorizes a two-year gap between graduation from high school (or receipt of a
GED) and enrollment in an institution for a qualifying student to maintain eligibility for lottery
tuition scholarship funds.
Significant Issues
The bill is consistent with several recommendations of the Governor’s Task Force on Higher
Education.
Currently, all qualified students enrolled in a two- or four-year public post-secondary institution
may receive a Lottery Success Scholarship. Other public and private non-profit institutions such
as the College of Santa Fe, St. John’s College, and College of the Southwest and tribal colleges
are not eligible to receive lottery funds.
High school students graduating from a school in New Mexico operated by the Bureau of Indian
Affairs and out-of-state members of the Navajo tribe, who reside on the Navajo reservation, as
certified by the Navajo Department of Higher Education, are eligible for lottery tuition
scholarships if they attend a public post-secondary institution.
Two- and four-year post secondary institutions created by an Indian nation, tribe or pueblo or
federal government which may be eligible to participate include the following: Dine College,
Institute of American Indian Arts (IAIA), Southwest Indian Polytechnic Institute (SWIPI) and
Crownpoint Institute of Technology (CIT). Currently, CIT is not accredited; therefore, it does
not receive state funding. According to the Higher Learning Commission (HLC), the HLC board
validated the initial candidacy of CIT in the accreditation process in October 2003.
According to information from the Office of Indian Affairs, enrollments at tribal colleges are
rising because Native Americans are choosing to attend institutions which are tailored to their
educational choices, rising tuition costs at non-tribal schools and also to be closer to their homes.
Note that New Mexico residents residing on tribal lands and enrolled as a member of the tribe
are not required to file personal income tax.
FISCAL IMPLICATIONS
Two-Year Eligibility Gap. Based on analyses of similar legislation in 2003 and 2004 as well as
an LFC/CHE survey of institutions in 2003, the projected fiscal impact is difficult to determine.
The following is based on student eligibility and award data compiled by CHE in 2003, with
some modifications.
Also based on similar legislation from the 2003 and 2004 sessions, this bill would be interpreted
by institutions as similar to the current program, such that entering students would not be eligible
for lottery tuition scholarship funding until the spring semester. The one semester impact could
be about $1.2 to $1.6 million. The incremental full year cost would be about $2.4 to $3.2
million.
A 2005 CHE bill analysis shows a fiscal impact of $1,262.2 thousand in FY06, rising to $6,950.0
thousand after four years.
pg_0004
House Bill 119/aHEC/aHAFC/aHFl#1/aHFl#2
Expansion to Regionally Accredited Tribal Colleges Located in New Mexico. Tribal
institutions are not currently required to provide student data to CHE. Various scenarios were
analyzed over the last few years and are summarized below. The costs below are for one full
year, and would escalate as additional cohorts are added.
In its 2005 analysis, CHE estimates the cost at $20.3 thousand in the first year, with a cost in four
years of $69.3 thousand.
Based on data provided to CHE in 2003 by Dine, IAIA, SWIPI and CIT regarding potential
eligibility and annual tuition, the following awards were estimated:
Dine College $40.8
IAIA $45.6
SIPI No tuition *
CIT $3.0 **
Total $89.4
However, at a 2003 legislative hearing, tribal college representatives testified the bill would have
a potential fiscal impact of approximately $350.0 thousand. An analysis of similar legislation
from the 2002 session (HB 252) reflected potential fiscal impact of $837.0 thousand based on a
CHE analysis of financial aid data, including student enrollment and annual tuition.
Notes:
* SWIPI does not charge tuition. Books and room and board are also provided free of charge to
members of federally recognized Indian tribes.
** Upon receipt of accreditation status from the North Central Association Higher Learning
Commission, the fiscal cost to include CIT could range from $3.0 to $648.0 thousand. The
potential timing of a decision regarding the institution’s candidacy is currently not certain.
New Mexico Residents - United States Armed Forces Temporarily Assigned to Work Out-
of-State. The projected fiscal impact is expected to be minimal.
New Mexico Residents – Federal and State Government Employees Temporarily Assigned
To Work Out-of-state. The projected fiscal impact is expected to be minimal.
New Mexico Residents - Tribal Government Employees Temporarily Assigned To Work
Out-of-State. The projected fiscal impact is expected to be minimal.
TECHNICAL ISSUES
The bill does not include an effective date.
OTHER SUBSTANTIVE ISSUES
To evaluate impacts of potential changes to the lottery tuition scholarship program, the
legislature may wish to consider requiring an annual review and reporting to the Legislative
pg_0005
House Bill 119/aHEC/aHAFC/aHFl#1/aHFl#2
Finance Committee, Legislative Education Study Committee, Department of Finance and
Administration and the Office of the Governor by:
•
New Mexico Lottery Authority on revenue situation and outlook and
•
Commission on Higher Education on
o
expenditure situation and outlook
o
fund balance situation and outlook
o
policy and fiscal impacts of each change to lottery scholarship program enacted
by the 2004 legislature
AW/yr