Legislative Finance Committee

The state upped its share of healthcare insurance premiums for public employees by more than $100 million a year to make insurance more affordable, but that price tag is expected to grow substantially during the next budget year because rising inflation costs will be mostly absorbed by state and public school employers.

The new child welfare data system, originally expected to be complete in October 2022 at a cost of $36 million, is now expected to be ready in August 2028 at a cost of $95.4 million. 

New Mexico subsidizes health insurance purchased through the exchange at higher rates and for more buyers than most states but may need to consider cost-containment measures to sustain the fund that supports the subsidies.

Actual and estimated general fund revenue collections through the end of 2025-2026 fiscal year indicates revenue is tracking $609 million, or 4.6 percent, above the December 2025 consensus forecast, driven primarily by exceptionally strong corporate income tax collections.

Both the number and value of industrial revenue bonds (IRBs) issued by local governments have increased multifold over the last 25 years, but neither the state nor local governments require sufficient reporting on IRBs to determine whether that trade-off pays off.

Healthcare costs, both commercial rates and the costs of public assistance, have climbed in the last five years, with high hospital costs, specialty drugs, provider wages, and general inflation driving the increases in both markets.
Staff Presentation: Overview of the NM Healthcare System, July 2026
Staff Presentation: Healthcare Cost Drivers in New Mexico and Medicaid Oversight, July 2026

New Mexico’s below-average high school graduation rate sets up a cycle that leads to lower incomes and fewer adults working, creating a drag on the state’s economy.
Staff Presentation: Impact of Increased Education Attainment, July 2026
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