Santa Fe, N.M. — Democratic Governor Michelle Lujan Grisham has unveiled a comprehensive $10.9 billion budget proposal aimed at addressing critical state needs, including early childhood education, water recycling, and mental health services. The plan seeks to increase general fund spending by $720 million, a 7% rise for the fiscal year spanning July 2025 through June 2026.
Key Focus Areas
1. Early Childhood Education and K-12 Investment
The budget includes a $206 million increase for early childhood programs, targeting affordable preschool and childcare for families, particularly those with children under three. This funding draws from both the state’s general fund and a multibillion-dollar trust funded by oil revenues.
For K-12 public education, $4.6 billion is allocated, a 3% increase. The funds will address extended school calendars, free school meals, and literacy programs, including tutoring and summer reading initiatives.
2. Water Recycling and Sustainability
A proposed $200 million in one-time spending is earmarked for addressing water scarcity. The governor is advocating for $75 million to support projects that recycle polluted water from oil and natural gas production. This includes purifying brackish water and developing sustainable industrial water solutions, with potential legislation introducing a per-barrel fee on treated water.
3. Mental Health and Addiction Treatment
Acknowledging the growing challenges of homelessness and crime, the budget outlines $1 billion in trust funding for addiction and mental health services. This initiative aims to reduce crime rates and homelessness by offering structured treatment programs, including potential mandatory participation for some individuals.
Economic Context and Workforce Support
The budget reflects a cautious approach as income from local oil production stabilizes. As the nation’s second-largest oil producer, New Mexico relies heavily on petroleum revenues, which contribute to key funding sources like the Land Grant Permanent Fund.
A 3% pay increase for state government and public school employees is also included, totaling $172 million.
Infrastructure and Native American Community Support
Broadband Expansion
The governor has proposed $70 million for satellite internet services in rural areas, with Elon Musk’s Starlink as a key provider, while the state continues building fiberoptic infrastructure for long-term high-speed connectivity.
Support for Native American Communities
Over $90 million is allocated to bolster educational programs in Native American communities, with an emphasis on indigenous language preservation and culturally autonomous education systems.
Legislative Outlook
The Legislature will develop its own spending plan during the session starting January 21. The governor’s proposal sets the stage for negotiations, and any approved budget will require her final approval.
This budget underscores New Mexico’s commitment to addressing pressing societal challenges while balancing fiscal sustainability in light of shifting economic trends.
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