$11.1 billion budget focuses on investments that will make life more affordable for New Mexicans, while maintaining robust reserves and growing our economy in the years ahead
Santa Fe, N.M. – Today, the New Mexico House of Representatives passed House Bill 2: the General Appropriations Act, with broad bipartisan support, by a vote of 55-15. The House's proposed state budget for Fiscal Year 2027 totals $11.1 billion, up 2.7% from last year, while maintaining responsible 30% reserves.
Despite slowing state revenue projections and growing economic uncertainty at the federal level, New Mexico remains in a strong financial position for the upcoming fiscal year. Years of responsible budgeting mean the state can maintain and responsibly grow its investments in key areas of need for New Mexicans now – including healthcare, housing, public safety, education, childcare, conservation and economic development, while continuing to save.
"As other states are forced to make tough decisions about whether to cut services or raise taxes, New Mexicans can count on their state legislature to keep investing in what matters most – from affordable housing and accessible healthcare to safe communities and strong schools," said House Appropriations and Finance Committee (HAFC) Chair Rep. Nathan Small (D-Las Cruces), sponsor of HB 2. "I am deeply grateful to our committee members and staff for building such a strong, responsible budget in an incredibly open, transparent, and collaborative process. Our budget is better because of this process."
HB 2 prioritizes expanding access to healthcare, building more housing that is affordable for working people, and establishing a high-quality, sustainable universal childcare system. HB 2 also makes impactful one-time investments in water, economic development, and clean energy.
"This budget focuses our resources on investments that make a difference for New Mexico families now, while also setting us up for continued economic growth and stability in the long run," said HAFC Vice Chair Rep. Meredith Dixon (D-Albuquerque), co-sponsor of HB 2. "We know there's still a lot of uncertainty about what's to come, so we are also ensuring that our state has strong, accessible, liquid reserves to ensure we are prepared for whatever lies ahead."
The budget now heads to the Senate.
A non-comprehensive breakout of key investments in HB 2 by topic areas is below.
Education and Childcare
HB 2 builds upon the legislature's transformational investments in early childhood care and education, establishes a sustainable framework for a high-quality, universal child care program, and continues to fund cradle-to-career educational opportunities for New Mexico's kids.
Directs nearly $80 million to universal childcare, including over $60 million to ensure early childhood educators are paid a good, living wage through the wage and career lattice, so New Mexico can recruit and retain quality providers and build the capacity needed to fully implement the program
Allocates a total of $4.7 billion in recurring funding for public education
Dedicates over $73 million in recurring funding to decrease healthcare costs for teachers (80/20), so educators and school staff can keep more of what they earn
Increases funding for the Teacher Loan Repayment Program and Educator Fellows Program to retain and attract more educators to New Mexico
Fully funds the Black, Hispanic, and Multicultural Education Acts
Invests in the Higher Education Major Projects Fund, which fully funds the UNM School of Medicine expansion and a mixed-use humanities building at NMSU, while also providing a first-of-its-kind dedicated funding source for student housing and other major higher ed projects statewide
Appropriates additional funding for athletics, building renewal and replacement, and select research and service projects
Healthcare
HB 2 expands access to affordable healthcare, while also investing in New Mexico's healthcare workforce to help recruit and retain providers. The budget also includes funding to improve food security amidst federal funding cuts to the Supplemental Nutrition Assistance Program (SNAP).
Delivers $11.1 billion in state and federal funding for Medicaid
Dedicates $254 million to lowering out-of-pocket healthcare costs, including keeping marketplace insurance premiums affordable and supporting those who may lose eligibility for Medicaid due to federal changes
Invests in growing the healthcare workforce with increased pay for medical residents and fellows at UNM medical school, $25 million to expand loan repayment assistance, and $24 million for rural residencies and rotations
Allocates $3 million for the state-level expansion of the Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), amid federal cuts to these vital programs
Public Safety
This budget invests in improving the safety of our communities by making sure law enforcement and courts have the staffing and resources they need to keep New Mexicans safe.
Invests $3 million annually in evidence-based diversion programs at CYFD, to help prevent at-risk youth from becoming involved in crime and lead those with minor offenses down a better path
Allocates $2 million for crime-reduction grants through the New Mexico Sentencing Commission
Appropriates $2 million for intelligence-led policing
Directs $1.25 million to the Organized Crime Commission
Makes dedicated investments in our justice system, including additional funding to:
Help District Attorneys to continue their important work,
Expand Juvenile and Teen Drug Court
Add a family court judge in New Mexico's Second Judicial District
Housing
HB 2 builds on last year's historic $110 million investment in affordable housing by continuing to holistically address New Mexico's housing crisis.
Dedicates another $100 million in funding to address housing shortages, homelessness, and tribal housing issues in the state. This funding includes:
$30 million for the Opportunity Enterprise Housing Revolving Fund for critical infrastructure for new housing
$30 million to the Department of Finance and Administration (DFA) for direct regional housing projects across the state
$30 million to support housing programs at Mortgage Finance Authority (MFA), like Linkages, Rapid Rehousing, and homelessness prevention
Allocates $10 million for tribal housing
Provides $5 million for rental assistance to prevent homelessness
Water and Natural Resources
HB 2 makes significant investments to protect New Mexico's water supply and other natural resources, with increased resources for state agencies, as well as funding for research and improvement programs.
Dedicates over $300 million for water projects, including $100 million to the Water Project Fund for water infrastructure projects statewide
Provides dedicated funding for critical local projects, including $2.5 million for acequia projects and $9 million to the Irrigation and Construction Works Fund
Delivers $22.5 million to Lower Rio Grande Water Settlement projects to fulfill Texas v. New Mexico's obligations and ensure water security in Southern New Mexico
Continues recurring funding for Soil and Water Conservation Districts
Provides $15 million to support New Mexico's River Stewards Program
Appropriates $2.5 million to the Office of the State Engineer to implement the Water Security Planning Act
Dedicates $2 million for clean water testing and to address well water contamination
Supports water project development by beneficiaries of the Indian Water Rights Settlement with a $10 million appropriation
Provides $22 million to NM Tech for aquifer mapping to strategically plan the state's water future
Supports New Mexico farmers with $10 million for agriculture-related water projects
Allocates $20 million to clean up abandoned uranium mines and other contaminated sites
Economic Development
This budget continues to support the growth and diversification of New Mexico's economy and fosters a strong, resilient business environment that spans the state's urban and rural areas.
Dedicates more than $200 million to economic development, including:
$25 million for circular economy and advanced technology
$25 million for research and development initiatives to attract innovative and growing industries to the state
Continued funding for grants through the Economic Development Department's (EDD) Creative Industries Division
Funding to support the development of quantum ecosystems
Invests $75 million in New Mexico's transition to clean, sustainable energy, with:
$25 million to complete community energy projects
$10 million for geothermal development and investments
$10 million for grid modernization, including microgrid development
$1.5 million to install community solar at the Public Regulation Commission
Members of the public are welcome to attend floor sessions and committee meetings at the New Mexico Roundhouse, and can tune in virtually through the New Mexico Legislature's Webcasts tab. Public comment can also be provided in-person, and via phone or Zoom as directed on the daily schedule.
