Dec. 12 – Gov. Michelle Lujan Grisham on Thursday released her version of the state’s fiscal year 2026 budget, proposing a 7% increase in recurring general appropriations, plus an additional $2.3 billion in one-time spending.
While the final version of the budget will be worked out during the upcoming legislative session – which will begin on January 21 – Lujan Grisham’s recommendation, which includes $10.9 billion in recurring general expenditures, sets clear expectations for how the executive branch of the is expected. to spend its money, with big increases going to infrastructure, health care and services for children and families.
“My Executive Budget Recommendation builds on the success we have achieved as we boldly invest in innovative solutions that support our children, strengthen families, improve schools, support our local businesses and uplift communities,” Lujan Grisham wrote in a letter in which he introduced the recommendation.
Early signs from lawmakers, however, indicate that neither Lujan Grisham nor the agencies she oversees are likely to fulfill all of their budgetary wishes.
Sen. George Muñoz, a Gallup Democrat and chairman of the Legislative Finance Committee, has repeatedly urged caution in spending state money — including as state agencies went before the committee this week and some of them asked for significant budget increases.
“We must balance diversifying the economy and educating children, building roads and addressing critical behavioral health care needs, patrolling highways and securing our state’s water future,” Muñoz wrote in the newsletter of the committee in November. “Our job is to make these difficult decisions while ensuring we achieve a balanced budget.”
Senate Minority Leader Bill Sharer criticized the governor’s proposed 7% increase in recurring spending.
“It’s clearly too much,” Sharer, R-Farmington, said in an interview Thursday. “After three years in a row of tremendous growth, another 7% is simply unfathomable and unsustainable.”
Sharer said one-time credits for things like infrastructure improvements would make more sense for now as the state waits for the oil and gas revenue boom to turn into a bust.
Given the state’s clear budget projections, Wayne Propst, Cabinet Secretary for the Department of Finance and Administration, said the 7% increase in spending is “sustainable.”
The governor released her budget recommendations — which typically come shortly before the start of the legislative session in January — unusually early this year. Propst said this will give the public and lawmakers time to digest the details of her more than 200 pages of recommendations.
“There is no reason to wait until the week before the session because that doesn’t give the public time — in fact, it doesn’t give the Legislature time — to really analyze what the executive branch is proposing,” he said.
Infrastructure, water and health care are among the priorities
What is the governor hoping for in fiscal year 2026?
Investments in infrastructure are among its top financing priorities. Her recommendation includes $300 million for road construction and maintenance, plus $70 million to support satellite internet connectivity.
She also wants to implement the 50-year water action plan she announced earlier this year. Her budget request includes $75 million for the Strategic Water Supply, which would treat brackish water and oil and gas byproducts for industrial use, plus tens of millions more for rural water infrastructure, aquifer monitoring and groundwater cleanup efforts.
Education would remain by far the largest piece of the budget pie, with $4.6 billion – a 3% increase – going to the Ministry of Public Education and $1.4 billion to the Ministry of Higher Education.
Wanting to continue focusing on child welfare and early learning, the governor is proposing an additional $45.2 million to expand pre-K slots and $98 million for child care assistance, as well as a nearly 10% increase in the budget for the still struggling children. Department of Youth and Family.
Lujan Grisham also recommended additional funding for New Mexico’s health care system, proposing a nearly 11% increase to the health care authority’s budget — the largest increase for any state agency. Major spending priorities include $50 million to support rural health care providers and facilities, and $100 million to expand behavioral health care services.
And finally, the governor recommended some funding for her public safety agenda — the subject of a lackluster special session in July in which lawmakers from Lujan Grisham’s own party largely rejected her proposals — including an additional $4.5 million for the state commission for organized crime and $45 million. for the treatment of hepatitis C and opioid use in prisons.
But the bulk of the public safety movement will come from legislative changes — and Lujan Grisham plans to introduce a “robust package of bills” to implement those changes, said Daniel Schlegel, the governor’s chief of staff .
The governor’s staff declined to provide details Thursday on whether New Mexico residents can expect any tax changes.
Schlegel said discussing these changes would be “premature,” although he added: “There is some interest in some tax changes.”
This is a developing story and will be updated.
