New Mexico’s Legislative Finance Committee (LFC) has proposed a $10.8 billion state budget for the 2025-2026 fiscal year, marking a 5.7% increase over the planned spending for 2025. The announcement, made on Wednesday, highlights a focus on education, healthcare, infrastructure, and long-term savings for the state’s future.

Prioritizing Fiscal Responsibility and Quality of Life

Senator George Muñoz, chairman of the LFC and the Senate Finance Committee, emphasized the importance of fiscal restraint in managing the state’s growing revenue. “Fiscal restraint has been critical to our successful efforts to transform the revenue boom of the last few years into long-term support for state services,” he said.

The proposed budget aims to balance New Mexicans’ income growth, access to healthcare, and quality of life improvements while setting aside substantial reserves for the future.

Highlights of the Proposed Budget

The LFC’s recommendations include $3 billion in one-time spending and allocate 45% of the $577 million recurring general fund increase to public education. Key budget features are:

• Education: $855 million for special projects and $1.7 billion transferred to endowments and other funds. Additionally, public education will see a significant boost, with a formula-based allocation for school districts and charter schools.
• Higher Education: A 3% funding increase, translating to $36 million.
• Healthcare: $79 million additional funding for Medicaid under the Health Care Authority.
• Salaries: An average 4% pay increase for state employees and educators, totaling $134 million.

Key Infrastructure and Environmental Initiatives

The budget proposal also includes investments in infrastructure and environmental projects:

• $50 million for regional recreation centers and quality-of-life grants.
• $350 million allocated to transportation projects.
• A new community benefit fund targeting electrification, transportation, and clean jobs infrastructure to help local communities reduce greenhouse gas emissions and enhance air, water, and land quality.

Collaboration with the Governor’s Office

Governor Michelle Lujan Grisham’s proposed budget, released in December, closely aligns with the LFC’s recommendations. Her plan outlines $10.9 billion in recurring spending, including $172 million for state employee and educator raises.

Senate Majority Leader Peter Wirth noted the similarities between the two budgets, describing them as “not that far apart,” signaling a collaborative session ahead.

Both proposals focus on maintaining strong reserves—33% under the LFC plan and 30.4% under the governor’s recommendation.

Ensuring Long-Term Stability

Wayne Propst, Cabinet Secretary of the Department of Finance and Administration, applauded the LFC’s efforts, emphasizing the importance of building strong reserves for the future. “We’ve been proactive in building strong reserves and setting aside billions for the future,” Propst said. “These next 60 days will test our collective resolve to resist unnecessary spending and stay focused on building a strong and stable financial future for New Mexico.”

Long-Term Vision for New Mexico

Senate President Pro Tem Mimi Stewart highlighted the budget’s environmental benefits, such as funding for electrification and clean jobs infrastructure, which aim to create healthier communities.

Rep. Nathan Small, chair of the House Appropriations and Finance Committee, stressed the importance of wise spending. “We have an enviable opportunity to spend increased amounts today while also saving for the future,” Small said. The budget’s focus on sustainable funding for public servants like teachers, police officers, and healthcare workers contrasts with the state’s historical “boom-and-bust” approach.

A Bright Financial Future

If we maintain responsible policies, we’ll continue on this path to growth for the next 10 years.”

This budget reflects a vision not only for immediate improvements in New Mexicans’ lives but also for a secure and prosperous future.

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