Funding deadline looms for New Mexico lottery scholarships

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SANTA FE, N.M. (AP) — Reserves are nearly depleted for New Mexico state scholarships backed by lottery proceeds that cover about 90 percent of tuition for qualifying students, higher education officials warned lawmakers on Tuesday.

Higher Education Secretary Barbara Damron told lawmakers that tuition increases have outpaced funding sources in recent years.

Lottery-backed scholarships currently cover about 90 percent of tuition costs for the pool of qualifying students. Adjustments could be made in June, when funding levels and student needs are evaluated again.

About 32,000 students rely on the money.

Lottery ticket sales provide $40 million a year to the scholarships. Liquor excise taxes contribute another $19 million — but that funding source lasts only until mid-2018.

Tuition support would be reduced by 30 percent in the fall of 2018 if no action is taken, Damron said.

Sen. John Arthur Smith, D-Deming, said the liquor tax funds are needed in the state's general fund, where about 45 cents of every dollar goes toward public education.

"There will be a witching hour on that, and we have to have a soft landing for the students" who receive scholarships, said Smith, chairman of the legislative finance committee. "I don't know what we're going to do."

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