New Mexico

New Mexico

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FY2027 (proposed)
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Proposed Budget - Fiscal Year 2027

On December 22, 2025, New Mexico Governor Michelle Lujan Grisham submitted her fiscal year 2027 budget recommendation. The proposed budget calls for total fund spending of $33.95 billion, an increase of 2.1 percent from fiscal 2026, and recurring general fund spending of $11.33 billion, an increase of 4.6 percent from fiscal 2026. The budget also calls for $1.7 billion of nonrecurring general fund appropriations. The fiscal 2027 budget recommendation is based on a recurring general fund revenue estimate of $13.9 billion, a 1.2 percent increase from fiscal 2026’s projected level. The budget projects a total balance in general fund reserves of $3.4 billion, which represents 30.0 percent of recurring general fund appropriations.

Proposed Budget Highlights 

The governor’s budget prioritizes education, expands access to childcare, supports educators and students across New Mexico’s classrooms, expands access to quality health care, and continues investments in long-term challenges such as public safety, housing, and economic diversification. The budget includes the following recommendations:

Early Childhood

• Continues to fund Universal Childcare.
• Expands access to early prekindergarten by 500 additional spots. 
• Recommends allocating funds over three years to implement the wage scale and career lattice framework for the early childhood workforce. 

Education

• Establishes a reading intervention program based on the science of reading. 
• Directs funds to purchase high quality math educational materials. 
• Funds the Universal School Meals program. 
• Directs funds for educator recruitment, development, and retention. 
• Provides funds to the Higher Education Department for the Opportunity Scholarship. 
• Provides a compensation increase for all K-12 educational personnel and State employees. 

Education

• Recommends funds to continue training elementary educators in the science of reading
• Expands structured literacy professional development into secondary schools and supports a second year of the summer reading intervention program 
• Directs funds for out-of-school learning, summer enrichment, and tutoring. 
• Funds the Universal Free Meals program
• Provides a three percent across-the-board raise for employees of K-12 public schools and higher education institutions
• Includes funds for the Opportunity Scholarship to cover tuition and fees 
• Directs funds for career technical education and other work-based learning programs 
  

Healthcare

• Provides funding to the Health Care Authority to strengthen its administration of income support, Medicaid, SNAP, and other foundational programs by: 
  
  • Replacing the decreased federal administrative percentage for the SNAP program and providing funds to support 150 new full-time positions. 
  • Providing funds for system improvements and training to reduce SNAP payment errors. 
  • Directing funds for temporary and contract staff to maintain eligibility processing and benefit administration and strengthening and modernizing the systems that support these core services. 
• Prioritizes targeted cost-driven increases to Medicaid including supporting higher-per-member-per-month payments to managed care organizations. 
• Provides funds to the Aging and Long-Term Services Department to strengthen New MexiCare. 
• Recommends funds over three years to improve service delivery and meet deliverables at the Children, Youth, and Families Department. 

Infrastructure

• Directs funds for water conservation and management including funds for the Strategic Water Reserve, improvements in the lower Rio Grande watershed, and advancing Indian Water Rights settlement agreements. 
• Provides funds to the Strategic Water Supply Program. 
• Recommends funds for statewide road construction and maintenance. 
• Requests funds for rural air service enhancements to strengthen New Mexico’s air travel network. 

Economic Development

• Directs funds to the Local Economic Development Act (LEDA) Fund. 
• Provides funds to the Economic Development Department for the Job Training Incentive Program. 
• Recommends funds to support business recruitment efforts to enable the state to continue attracting new companies and creating jobs. 
• Recommends funding a quantum bench-marking initiative to establish the state as a hub for testing and validating quantum technologies. 
• Directs funds to the Tourism Department for national marketing and advertising as well as provides grants to tribal and local governments for tourism-related infrastructure projects. 

Public Safety

• Continues the Organized Crime Commission. 
• Directs funds to the Department of Public Safety to support a statewide intelligence-led policing program and for critical technology upgrades. 
• Invests in wildfire preparedness grant programs and provides funds to develop a statewide AI-enabled wildfire early-detection camera network. 

Housing

• Provides funds for homelessness initiatives throughout the state. 
• Continues to fund affordable and attainable housing throughout the state. 

Proposed Budget Information
Fiscal Year 2027 Budget Proposal 

Fiscal Year 2027 Budget Brief 

Governor’s Press Release

Revenue Forecast – December 2025