Legislative Finance Committee

New Mexico has enacted legislation and significantly increased appropriations in support child welfare system improvements, but the state has faced implementation challenges.

While the Legislature has invested over $2.2 billion over the last three years to increase rates paid to healthcare providers and for startup costs for new health services, information on whether the investment is improving access is skimpy.

The healthcare insurance premium surtax generates more money for the healthcare affordability fund than needed to support programs that make health insurance more accessible, but changes on the federal level could increase demand.

Public school funding, teacher salaries, prekindergarten enrollment, the number of community schools, and Public Education Department staffing have all increased significantly since the court in the Martinez-Yazzie lawsuit concluded New Mexico schools were failing to provide students with a sufficient education, but student performance has changed little.

While oil and gas operators plug most inactive wells, the state must plug thousands “orphaned” by drillers, a job that is likely to take close to a decade and cost more than $200 million.

Legislators entered the legislative session with an uncertain federal budget and slowing state revenue growth; however, the state was in a strong financial position, allowing for a 6 percent increase in recurring spending and $3 billion in special appropriations.

At the end of the third quarter of FY25, outstanding capital outlay balances totaled an estimated $5.4 billion across more than 4,700 active projects.

The cost of new construction for higher education projects doubled from $520 per square foot in 2022 to $1,038 per square foot in 2024 and has continued to climb in 2025, with growth in higher education construction costs far outpacing growth in the amount that can be raised through the general obligation bonds that pay for it.