By Daniel J. Chacón
The Santa Fe New Mexican
New Mexico’s $10.8 billion spending plan for the upcoming fiscal year is headed to the Senate with promises of a thorough review.
Budget allocations for a number of high-profile proposals have either been watered down or not included at all.
“We’re going to dig into it,” Senate Finance Committee Chair George Muñoz said after the House passed the measure on a 50-18 vote Monday. He noted the proposed budget, House Bill 2, cleared the House Appropriations and Finance Committee in less than 15 minutes Friday.
“It kind of looks like a Christmas tree and a hodgepodge of stuff that’s in there, so we’ll see what got fixed, what didn’t get fixed and then start talking to agencies,” he added.
Rep. Nathan Small, D-Las Cruces, chairman of the House budget committee, said the plan endorsed by his chamber, which reflects a nearly 6% increase in spending over the current year, would hold over $3 billion in reserves to help bolster the state in the face of potential federal spending cuts.
But it doesn’t include funding tied to some key measures working their way through the Legislature, such as a massive Medicaid expansion.
The Children, Youth and Families Department railed against HB 2, saying it left out tens of millions of dollars the agency had requested to work toward improvements in the state’s struggling child welfare system, including funds to address a long-standing worker shortage.
Muñoz, a Gallup Democrat, said he hasn’t had an opportunity to review the House’s final budget recommendation in detail but indicated an early look revealed matters of contention. “What I’m seeing is a lot of appropriations for special projects,” he said. “Did we really fix the things we need to fix in government before we went off to special projects?”
That and other questions are poised to be answered as early as Tuesday morning when his powerful committee receives an overview of the budget proposal.
The House floor vote, following three hours of discussion and debate, came after Republicans introduced a budget substitute that would have sent a $600 check to every New Mexico resident.
The lead sponsor of the substitute budget bill, Rep. Cathrynn Brown, R-Carlsbad, called it a dividend check “celebrating and benefiting from the harvesting of the state’s vast mineral wealth,” a reference to the state’s bonanza in oil income.
“A family of four, for example, would receive a dividend payment of $2,400 with checks arriving after July 1 of this year,” she said.
The Republicans’ substitute would have resulted in a “modest recurring spending increase of 4.1% for fiscal year 2026,” Brown said, adding it reduced spending by $1.5 billion.
Other provisions of the proposal included appropriating an additional $250 million for transportation projects and increasing the monthly stipend for foster youth by $1,000.
However, the measure failed. The House voted 42-24 to table the substitute budget.
Rep. Andrea Romero, D-Santa Fe, called the proposed dividend “a blatant violation” of the state’s anti-donation clause by doing it through the state Department of Finance and Administration.
“We learned this in COVID,” she said.
‘This budget’s for you’
Small said in his closing remarks on the floor the spending plan offers something for every New Mexican.
“If you’re a rancher in Raton, this budget’s for you. If you’re a sixth grade student at Seboyeta Elementary [School near Laguna Pueblo], this budget’s for you. If you’re worried about affordability and access to health care in Albuquerque and any other part of the state, this budget’s for you,” he said.
The proposed budget is also for all state employees, including teachers, who are poised to receive average salary increases of 4%, Small said in a brief interview as he headed to a committee meeting after the floor vote.
The spending plan also bumps the base teacher pay by $5,000 at all three tiers of the teacher licensing system to $55,000, $65,000 and $75,000.
Rep. Joy Garratt, D-Albuquerque, said proposed spending for the Public Education Department — $4.7 billion — reflects the largest increase in the overall budget framework.
“This budget really demonstrates our commitment to supporting the strategies, the initiatives that will move our state’s students forward,” said Garratt, a retired teacher. “It shows we’re really committed to funding the efforts in reading and literacy, in math … so that our kids can really get the education they need.”
Water in, Medicaid Forward out
While the $10.8 billion plan covers more than 200 pages of expenditures, funding for a full out paid family and medical leave program isn’t part of the budget, Small said during a morning news briefing.
“That’s not part of this year’s budget,” he said. “There is money in the budget to help the Workforce Solutions Department develop effective strategies to support new parents and our infants in the state.”
Much of the funding for the program wouldn’t be needed until the future, but startup money is included, contingent on the legislation passing.
The proposed budget also doesn’t include the cost of legislation that would greatly expand access to Medicaid, or what proponents call Medicaid Forward.
“The ability for the [state Health Care Authority] over the next few years to keep doing that work is there,” Small said. “There’s not specific funding in this budget to do a specific expansion.”
Small said the budget recommendation includes $40 million for a “strategic water supply” backed by Gov. Michelle Lujan Grisham, in which naturally occurring brackish water would be treated for industrial purposes. The measure initially also called for treatment and reuse of wastewater from hydraulic fracturing, but the provision was stripped from the bill last week.
The initial proposal called for a $75 million appropriation for the strategic water supply, but the measure’s changes led to the reduced appropriation.
“I want to emphasize that broadly, when you look at the entire budget, there’s over $330 million, at least, as a floor, for new water investments,” Small said. “The bulk of our water investments in this budget are focused in many of these other areas. … Things like aquifer mapping, funds to the Water Trust Board to support local communities, including now to serve their wastewater needs, in addition to drinking water.”
‘First line of defense’
Small said the budget also would prepared the state to handle potential federal funding cuts.
“Right now our most important way to protect New Mexicans from … the federal chaos we’re seeing is our strong reserves,” he said.
The spending plan maintains reserves at 31.2%, equating to more than $3.3 billion.
“That’s our first line of defense to make sure that New Mexico is the best prepared financially, particularly when it comes to federal chaos,” Small said.
During the news briefing, Rep. Meredith Dixon, D-Albuquerque, said the bipartisan budget focuses the state’s resources on “effective solutions that will make a meaningful difference” in communities statewide.
“To improve public safety, we’re making sure law enforcement have the staffing and resources they need to keep New Mexicans safe,” said Dixon, vice chair of the House appropriations committee. “We’re also addressing the root causes of crime with historic investments in behavioral health care and substance use treatment with a $200 million down payment toward improving infrastructure and regional access to care.”