New Mexico Gov. Michelle Lujan Grisham on Wednesday signed the $11.1 billion state budget for the upcoming fiscal year, which begins July 1, and OK’d $1.26 billion in capital outlay projects.
The state budget contains funding for a number of high-profile state programs, including $300 million for higher education projects, $160 million for the nation’s first statewide universal child care program and $110 million for statewide housing initiatives.
During the legislative session, funding universal child care briefly presented a speed bump in the budgeting process. An initial proposal from the House of Representatives called for New Mexican families with a household income of 400% or more of the federal poverty level to pay mandatory co-pays – Lujan Grisham argued that such a funding mechanism was, by definition, not universal. Funding for the initiative ultimately came in a different bill, which only subjects higher-earning families to co-pays under certain signs of economic decline, including inflation and declining oil prices.
Lujan Grisham’s budget recommendation in December called for an $11.3 billion state budget. However, lawmakers entered the recent 30-day legislative session in January with an eye for reduced spending – Trump’s “One Big Beautiful Bill” and a dip in oil prices led lawmakers to take a cautious approach when it came to new recurring spending.
However, the state’s capacity for non-recurring spending, which includes one-time expenditures like large construction projects, remained strong. The $1.25 billion in capital outlay projects includes nearly $550 million for a new University of New Mexico School of Medicine, $75 million for the Las Vegas behavioral health institute and $20 million for state parks.
“Over the last seven years, we have fundamentally redefined New Mexico’s future by prioritizing historic investments in universal child care, health care, public safety and more while achieving record job growth and the nation’s largest drop in child poverty,” Lujan Grisham said in a statement Wednesday. “We’ve built a strong foundation of opportunity for New Mexico families, and while this budget marks a massive leap forward, our work is far from finished.”
The 2026 legislative session adjourned on Feb. 19 and lawmakers passed a total of 74 bills. By law, Wednesday is the final day for Lujan Grisham to sign them into law or veto them. If she does not take action on a bill by the March 11 deadline, the bill is considered a “pocket veto” and dies.
Although 30-day sessions are typically reserved for fiscal matters, Lujan Grisham authorized a number of non-budgetary matters in her final regular session as governor. She’s since signed a number of those priorities into law, including medical malpractice reform, education and literacy bills and free, universal child care.
Reader Comments