NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to HB-81, HB-258, SB14, SB126, SB-252

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

House Bill 9 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 proposes to distribute 100 percent of net lottery revenue to the lottery tuition program. The distribution to the school capital outlay fund is eliminated.

The proposed changes would become effective in FY2000.

FISCAL IMPLICATIONS

The New Mexico Lottery Authority's FY2000 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.

The estimated loss in future years simply assumes that lottery revenues grow by five percent. A five percent growth rate is consistent with the growth rate projections of other goods and services.

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 FY2001. The proposed increase in distribution to the tuition fund will allow them to continue providing 100 percent scholarships for several years.




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