SANTA FE, N.M. — Governor Michelle Lujan Grisham of New Mexico has unveiled an ambitious annual spending proposal focusing on early childhood education, water recycling initiatives, and mental health and addiction programs, all of which are intended to address rising public safety concerns.
The proposed budget, disclosed on Thursday, plans to increase general fund expenditures by approximately $720 million, bringing the total to $10.9 billion. This represents roughly a 7% rise for the fiscal period spanning from July 2025 to June 2026.
The governor’s plan indicates a more cautious approach to state spending as revenue from local oil production begins to stabilize. New Mexico currently ranks as the second-largest oil producer in the United States, following Texas, and ahead of North Dakota.
Before the legislative session starts on January 21, 2025, for a 60-day term to finalize the state budget, lawmakers will put together their own competing spending plan. The governor holds the authority to veto any section of this proposed budget.
There is a noted concern regarding how federal funding may be impacted with the impending inauguration of President-elect Donald Trump on January 20. New Mexico significantly relies on federal support for Medicaid and nutritional assistance programs aimed at low-income households, in addition to funding for education and environmental initiatives.
“It’s clear that the timing of President Trump’s inauguration coincides with the beginning of our legislative session,” noted Daniel Schlegel, the governor’s chief of staff.
Under the governor’s financial strategy, funding for K-12 public education would see a 3% increase, raising it to $4.6 billion. Public schools are facing new financial challenges as they work to improve academic outcomes amid a decline in student enrollment. The proposed budget also aims to enhance support for free school meals and literacy programs, including tutoring and summer reading initiatives.
A significant allocation of $206 million is earmarked for early childhood education, intended to widen access to preschool and childcare programs, particularly for families with children aged 3 and younger. Funding for this initiative will derive not only from the state’s general budget but also from a newly established trust fund for early education and enhanced distributions from the Land Grant Permanent Fund, which is supported by revenue from the oil industry.
In total, the governor’s budget presents $2.3 billion for one-time spending projects, which includes a $200 million investment aimed at tackling water scarcity issues. Additionally, Lujan Grisham is advocating for $75 million to support the cleaning and recycling of large quantities of polluted water generated from oil and gas operations. Legislation to impose fees on this polluted water is being proposed simultaneously.
Cabinet officials emphasize that addressing water treatment challenges is crucial for the state’s economic future, although environmental advocates express skepticism regarding these initiatives.
The proposed budget includes a $172 million total for salary increases for state government and public school employees, equating to an overall rise of roughly 3%. Leading Democratic lawmakers are also suggesting the establishment of a $1 billion trust to finance future initiatives aimed at combating addiction and mental health issues, in an effort to curb crime and homelessness.
Additionally, Governor Lujan Grisham’s spending plan allocates over $90 million to support Native American communities, focusing on the enhancement of autonomous educational programs that may involve the preservation of indigenous languages.
Furthermore, she is seeking $70 million investment to expedite internet connectivity for remote households and businesses through satellite services, particularly while the state’s fiber optic infrastructure is still being developed. This initiative would leverage services provided by Elon Musk’s satellite internet company, Starlink.
