New Mexico lawmakers have released a budget plan for the upcoming fiscal year, proposing a 5.7% increase in general fund spending.
The $10.8 billion proposal prioritizes health care, education, and early childhood programs, while also addressing public safety and homelessness.
A budget committee of the Democratic-led Legislature on Wednesday introduced their plan to increase spending for the fiscal year running from July 2025 to June 2026.
A major focus of the budget is health care, with combined state and federal spending rising by $3.3 billion, a 27% increase, bringing the total to $15.5 billion.
The boost largely targets Medicaid, with New Mexico leveraging a new hospital assessment to secure additional federal funding for the program.
Democratic state Sen. George Muñoz of Gallup said New Mexico is well positioned financially if the federal government were to reduce Medicaid allowances after President-elect Donald Trump takes office next week.
K-12 education spending is set to grow by 6%, adding $263 million to reach $4.7 billion.
The budget also includes $150 million for pilot programs aimed at improving literacy, math skills, and attendance in elementary schools.
Public employees, including teachers and college staff, are slated for an average 4% pay raise.
The plan leaves room for a proposed $1 billion endowment, which would fund expanded mental health and addiction treatment services through investment earnings.
Senate Majority Leader Peter Wirth emphasized the importance of addressing homelessness and public safety through better mental health support.
Governor Michelle Lujan Grisham has called for a slightly higher spending increase of 7% and has made combating crime and homelessness central to her agenda for the legislative session.
Meanwhile, Republican lawmakers are advocating for tax relief, proposing to eliminate the state’s top personal income tax rate of 5.9%.
Lawmakers will get into the details during the 60-day legislative session that starts Tuesday.
Adapted from an Associated Press article by Morgan Lee.
