New Mexico lawmakers to tackle reduced spending in the new year’s budget
Joshua Bowling, Source New Mexico
New Mexico’s 2026 legislative session begins Jan. 20. While state economists expect the budget to continue its streak of increased revenue, projections show it will be by slimmer margins than previously expected, and elected leaders have made it clear that few state agencies will receive everything they’ve requested.
In Legislative Finance Committee hearings in November and December, state agencies presented their funding requests to lawmakers and repeatedly faced warnings: The state is at its lowest point for “recurring funds” — which refers to ongoing spending, such as increasing the number of full-time employees at a state agency — since the COVID-19 pandemic.
New Mexico’s economy is “treading water” while much of the nation is in or near a recession, a recent Legislative Finance Committee report found. The report estimated the state would finish this fiscal year with $13.4 billion in recurring revenue — a nearly $323 million decrease since LFC’s previous forecast in August.
Lawmakers and state analysts attribute the low point to a number of factors, ranging from massive reductions to corporate income tax as part of President Donald Trump’s “One Big Beautiful Bill” to spending on the governor’s executive orders for disaster response.
“The tariffs, increased prices and higher uncertainty are impacting a wide range of areas. One example: Oil prices per barrel are down 20-plus percent,” Rep. Nathan Small (D-Las Cruces), who chairs the House Appropriations and Finance Committee, told Source NM. “There are no doom and gloom conclusions here. While we retain really strong non-recurring capacity and we’re in a safe place with really strong reserves. The ‘new money’ and the ability to invest in new programs, make a ton of new governmental hires — that is something that we’re going to have to watch very carefully.”
In recent hearings, lawmakers and legislative analysts blamed HR1, commonly known as the “One Big Beautiful Bill,” for significantly limiting the state’s revenue sources. The legislation gave hefty corporate income tax breaks to industries such as oil and gas and manufacturing, which combined make up half of New Mexico’s corporate tax base. Corporate income tax was briefly in the red this fiscal year for the first time since early in the pandemic, they said.
The federal fallout is responsible for tens of millions of dollars in revenue loss, according to the December LFC report. The federal increase to the standard deduction will lead to an estimated loss of $39.2 million for New Mexico and changes to Medicaid and state-directed payments will lead to an estimated loss of $17.1 million, the report says.
The LFC report projected that the state will only have $105.7 million in “new money,” which refers to a year’s total revenue minus the prior year’s spending. That amounts to less than 1% of growth from the current fiscal year.
Small said that he has confidence in the state’s finances and believes leaders are in a “strong position” to invest in the state. But that doesn’t mean there aren’t concerns.
Of particular concern, he said, are hiring new full-time employees at state agencies and paying for health insurance premiums. Small said he is “very fearful” of federal cuts to programs like Medicaid and wants to ensure the state doesn’t spread itself too thin by compensating for the federal cuts.
Rep. Nathan Small speaks during a news conference on cleaning up abandoned uranium mines and other contaminated sites on Feb. 7, 2025. (File photo/Source NM)
“That is something we are very, frankly, fearful of. Cutting billions of dollars to our health care system that is already stressed is quite concerning,” Small said. “It’s another reminder to make sure we retain the capacity to address those challenges the best that we can and it means not going too far on recurring spending in other areas.”
One way the state could spread itself too thin, the December LFC report says, is in funding emergency responses.
Spending on executive orders from the governor to pay for the state’s response to unexpected disasters like wildfires, flooding and the COVID-19 pandemic have become a growing point of contention between the fourth floor of the Roundhouse and state lawmakers. Those orders alone could wipe out all of New Mexico’s new money next fiscal year, the report says.
State agencies had opportunities in November and December to present their budget requests to lawmakers on the interim Legislative Finance Committee.
Budget requests ranged from the routine to the unexpected during those hearings. A coalition of cities and towns said water infrastructure projects are underfunded by $200 million; rural prosecutors asked for help with internet connections and high-mileage cars; the state Public Education Department secretary disclosed a $35 million shortfall after a debacle that involved paying multiple school districts to serve the same students virtually.
While 30-day legislative sessions typically are reserved for budgetary matters, Gov. Michelle Lujan Grisham’s office told Source NM that public safety will be on her legislative agenda, known as a call. Lawmakers in both parties have announced plans to propose legislation around firearm dealers and criminal sentencing.
The governor released her own $11.3 billion budget proposal on Dec. 22, a 4.6% increase over the current fiscal year that includes additional spending for the state’s universal child care program, as well as funding to compensate for decreased federal dollars.
“The recurring, very expensive new investments will be very challenging,” Small told Source. “This is the final year of the administration. In a lot of ways, we are and should be focused on finishing things out, as opposed to starting brand new initiatives.”
Albuquerque, Santa Fe record warmest December on record
This past December was the warmest December on record in several New Mexico communities, including Albuquerque and Santa Fe.
KRQE reports Albuquerque's average high temperature of about 47 degrees in December was more than 10 degrees warmer than the average high. Albuquerque came close to hitting the 70-degree mark twice last month, on Dec. 21 and again on Dec. 22.
Similarly, Santa Fe’s average high of about 40 degrees in December was almost nine degrees higher than the typical average highs. Temperatures rose as high as 64 degrees in Santa Fe on Dec. 22 and 24.
In addition to Albuquerque and Santa Fe, four other New Mexico communities marked the warmest December on record. Farmington, Gallup, Las Vegas, and Raton all had record-warm Decembers. Las Vegas recorded a temperature of 75 on Dec. 22.
Elsewhere around the state, a trio of eastern New Mexico towns marked the second-warmest December on record: Clayton, Tucumcari and Roswell. All three of those towns recorded temperatures in the low 80s during December.
Decision looms as advocates, AG push regulators to reject sale of New Mexico Gas Co.
Hannah Garcia, Albuquerque Journal
New Mexico’s 2026 legislative session begins Jan. 20. While state economists expect the budget to continue its streak of increased revenue, projections show it will be by slimmer margins than previously expected, and elected leaders have made it clear that few state agencies will receive everything they’ve requested.
In Legislative Finance Committee hearings in November and December, state agencies presented their funding requests to lawmakers and repeatedly faced warnings: The state is at its lowest point for “recurring funds” — which refers to ongoing spending, such as increasing the number of full-time employees at a state agency — since the COVID-19 pandemic.
New Mexico’s economy is “treading water” while much of the nation is in or near a recession, a recent Legislative Finance Committee report found. The report estimated the state would finish this fiscal year with $13.4 billion in recurring revenue — a nearly $323 million decrease since LFC’s previous forecast in August.
Lawmakers and state analysts attribute the low point to a number of factors, ranging from massive reductions to corporate income tax as part of President Donald Trump’s “One Big Beautiful Bill” to spending on the governor’s executive orders for disaster response.
“The tariffs, increased prices and higher uncertainty are impacting a wide range of areas. One example: Oil prices per barrel are down 20-plus percent,” Rep. Nathan Small (D-Las Cruces), who chairs the House Appropriations and Finance Committee, told Source NM. “There are no doom and gloom conclusions here. While we retain really strong non-recurring capacity and we’re in a safe place with really strong reserves. The ‘new money’ and the ability to invest in new programs, make a ton of new governmental hires — that is something that we’re going to have to watch very carefully.”
In recent hearings, lawmakers and legislative analysts blamed HR1, commonly known as the “One Big Beautiful Bill,” for significantly limiting the state’s revenue sources. The legislation gave hefty corporate income tax breaks to industries such as oil and gas and manufacturing, which combined make up half of New Mexico’s corporate tax base. Corporate income tax was briefly in the red this fiscal year for the first time since early in the pandemic, they said.
The federal fallout is responsible for tens of millions of dollars in revenue loss, according to the December LFC report. The federal increase to the standard deduction will lead to an estimated loss of $39.2 million for New Mexico and changes to Medicaid and state-directed payments will lead to an estimated loss of $17.1 million, the report says.
The LFC report projected that the state will only have $105.7 million in “new money,” which refers to a year’s total revenue minus the prior year’s spending. That amounts to less than 1% of growth from the current fiscal year.
Small said that he has confidence in the state’s finances and believes leaders are in a “strong position” to invest in the state. But that doesn’t mean there aren’t concerns.
Of particular concern, he said, are hiring new full-time employees at state agencies and paying for health insurance premiums. Small said he is “very fearful” of federal cuts to programs like Medicaid and wants to ensure the state doesn’t spread itself too thin by compensating for the federal cuts.
Rep. Nathan Small speaks during a news conference on cleaning up abandoned uranium mines and other contaminated sites on Feb. 7, 2025. (File photo/Source NM)
“That is something we are very, frankly, fearful of. Cutting billions of dollars to our health care system that is already stressed is quite concerning,” Small said. “It’s another reminder to make sure we retain the capacity to address those challenges the best that we can and it means not going too far on recurring spending in other areas.”
One way the state could spread itself too thin, the December LFC report says, is in funding emergency responses.
Spending on executive orders from the governor to pay for the state’s response to unexpected disasters like wildfires, flooding and the COVID-19 pandemic have become a growing point of contention between the fourth floor of the Roundhouse and state lawmakers. Those orders alone could wipe out all of New Mexico’s new money next fiscal year, the report says.
State agencies had opportunities in November and December to present their budget requests to lawmakers on the interim Legislative Finance Committee.
Budget requests ranged from the routine to the unexpected during those hearings. A coalition of cities and towns said water infrastructure projects are underfunded by $200 million; rural prosecutors asked for help with internet connections and high-mileage cars; the state Public Education Department secretary disclosed a $35 million shortfall after a debacle that involved paying multiple school districts to serve the same students virtually.
While 30-day legislative sessions typically are reserved for budgetary matters, Gov. Michelle Lujan Grisham’s office told Source NM that public safety will be on her legislative agenda, known as a call. Lawmakers in both parties have announced plans to propose legislation around firearm dealers and criminal sentencing.
The governor released her own $11.3 billion budget proposal on Dec. 22, a 4.6% increase over the current fiscal year that includes additional spending for the state’s universal child care program, as well as funding to compensate for decreased federal dollars.
“The recurring, very expensive new investments will be very challenging,” Small told Source. “This is the final year of the administration. In a lot of ways, we are and should be focused on finishing things out, as opposed to starting brand new initiatives.”
New Mexico communities prepare for Route 66 centennial celebrations all year long – Patrick Lohmann, Source New Mexico
New Mexico communities big and small have worked for a year or longer to unveil their celebrations next year for the 100-year anniversary of Route 66.
Along the 487-mile historic corridor crossing New Mexico from east to west, they’re restoring gas stations, painting murals, installing public art and fixing up neon signs. They’re planning community-wide parties featuring vintage cars, air shows and historical presentations about how the “Mother Road” shaped life in their communities.
A Route 66 Sign on Central Avenue in Albuquerque at night. (Rainer Grosskopf/Getty Images) That’s according to a list of roughly $4 million in grants the state Tourism Department has offered over the last two years to promote the centennial. Grants for infrastructure, marketing and special events range from $4,000, like for the Pinto Bean Route 66 Centennial Fiesta in Moriarty, to $250,000 for art installations in Albuquerque.
New Mexico State Historian Rob Martinez told Source New Mexico the celebrations are fitting to celebrate a road that connected the country and had profound impacts on tiny towns alongside it. Like the Camino Real and Santa Fe Trail, Route 66 created a “crossroads” of people and culture, he said.
“These trails and roads are very important in not just promoting New Mexico, but establishing our culture and changing it, bringing new peoples and new technologies and new ideas on the asphalt,” he said.
The El Rancho Hotel in Gallup along Route 66. Gallup and other communities across the state have been preparing for the 2026 Route 66 centennial for more than a year. (Patrick Lohmann/SourceNM) Beginning in 1926, with the help of congressional legislation creating a public highway system, the United States began building Route 66, seeking to connect growing cities and rural communities across the country with the help of the automobile.
Doing so in the state of New Mexico proved challenging due to its topography, according to the state Tourism Department. The first iteration of Route 66 entered New Mexico via Texas and shot northward to Santa Fe through Santa Rosa and Tucumcari, before dropping to Albuquerque through Los Lunas, heading back toward Laguna Pueblo and entering into Arizona just past Gallup.
Depression-era public works spending allowed the route to be straightened — eliminating the Los Lunas section — and paved. It was the first paved road in history. From there, it became the most famous American road in history, Martinez said.
Route 66 Neon Drive-Thru sign along the historic Route 66 in Grants, New Mexico, during dusk. (Jacob H/Getty Images) New Mexico’s slice of Route 66 has appeared in multiple works of art since then, according to Martinez. He remembers an episode of “I Love Lucy” featuring a road trip on Route 66 through Albuquerque. Nat King Cole sings about “Gallup, New Mexico” in the classic 1946 “Get Your Kicks,” and the 1940 film adaptation of John Steinbeck’s “Grapes of Wrath” starring Henry Fonda features the state prominently.
“Tulsa, Oklahoma is considered the capital of Route 66, although I would say it should be Gallup or Albuquerque,” Martinez said. “Though, I’m biased.”
Other projects the Tourism Department funded are beautification of highway overpasses in Guadalupe County, an improved gateway in Albuquerque’s Old Town and upgrades to the State Fair Tower and RV village at the New Mexico State Fair grounds.
Santa Rosa received $60,000 for a “musical road” along a half-mile stretch of Route 66 east of the village, paying local company San Bar Construction to install custom rumble strips on the shoulder of the road. At the right speed, drivers who steer their tires onto the rumble strips will hear “Get Your Kicks” playing.
Iconic TePee Curios souvenir shop on Route 66 with a vintage neon sign and mural. Located in Tucumcari, New Mexico. (Teresa Otto/Getty Images) Lisa Brassell, part of the town’s Route 66 committee, told Source that not all of the funding has come together yet. First, the village will need to secure the rights for the song, and the New Mexico Transportation Department will have to re-pave the road to remove any potholes that might cause a false note, she said.
“Otherwise, nobody can tell what the song is,” she said, laughing.
But even without the musical rumble strips, she said Santa Rosa has festivities planned throughout the year, including the regular use of one local man and his 1926 vintage car. “He’s become kind of a mascot,” she said.
She said Santa Rosa is just one of dozens of New Mexico communities putting their own local flavor on the celebration.
“It depends on each individual community, on how they capture that essence, that contribution that the Mother Road has made for our communities, especially in rural New Mexico,” she said. “We’re working hard in our communities to celebrate the birthday.”
Advocacy group wants endangered species listing for plant named after New Mexico botanist – Cathy Cook, Albuquerque Journal
An environmental advocacy group is petitioning for federal protections of a rare New Mexico flower that grows in an oil-rich region.
The nonprofit Center for Biological Diversity filed a petition with the U.S. Fish and Wildlife Service to list Allred’s flax under the Endangered Species Act in December. The orange-flowered perennial lives in gypsum soil and was discovered by botanists with the Bureau of Land Management and the New Mexico State Forestry Division in 2011. It was named after retired New Mexico State University botanist Kelly Allred, according to reporting by The Associated Press.
“It's a surprisingly beautiful little flower in an area that I think a lot of other people think of as barren,” said Brian Nowicki, the Center for Biological Diversity’s Southwest Program deputy director. “And it's one of those things that causes you to stop and pay closer attention to the small scale that life is happening sometimes on those really big landscapes that we have in New Mexico.”
Allred’s flax has chubby, waxy leaves that are able to keep in moisture and a branching, woody base.
The plant lives in the Yeso Hills of Eddy County. Herbicides have impacted part of the Yeso Hills and could become a threat to the species, according to the New Mexico Rare Plants website, which is maintained by the New Mexico Natural Heritage Program, the University of New Mexico Library and the state’s Energy, Minerals, and Natural Resources Department-Forestry Division's Endangered Plant Program. Road and pipeline projects have also impacted the plant in a few locations and could continue to affect it as oil and gas development in the area expands, the rare plants guide says.
The Center for Biological Diversity is petitioning to list Allred's flax as an endangered species.
Courtesy of Mike Howard
The Center for Biological Diversity identifies oil and gas development as a threat to the plant’s habitat.
“The very places where a lot of the oil wells are currently exploding in number, right on top of that is where these plants have the soil that they are able to live in,” Nowicki said.
New Mexico Oil and Gas Association President Missi Currier said in a statement that association members protect native species like Allred’s flax and are “committed to science-based solutions and collaborative approaches that balance conservation with the energy needs that power our nation and beyond.”
The state of New Mexico listed Allred’s flax as an endangered species in 2020, which protects it from being collected, removed, transported, exported or sold without a valid permit for specific scientific purposes. It’s unclear if or when the federal government could grant protections.
“Usually, it's going to be months before they have a chance to process (the petition) and give a response,” Nowicki said.
For Nowicki, Allred’s flax isn’t the only species of concern in New Mexico’s oil-rich southeastern region. The Center for Biological Diversity has also pushed for protections of the dunes sagebrush lizard, a small, light-brown lizard that was listed as endangered in 2024 and lives in eastern New Mexico and west Texas.
Texas Attorney General Ken Paxton sued over the lizard’s listing. The lawsuit called the rule protecting the lizard improperly vague “due to its failure to provide the public with adequate guidance regarding activities that can and cannot occur within the dunes sagebrush lizard’s large geographic range, which overlaps with the Permian Basin — an economically vital area for the state of Texas.”
The Center for Biological Diversity filed a request to intervene in the lawsuit to defend the lizard’s listing. That request was denied, a decision the center is appealing.
Nowicki has visited New Mexico’s Permian Basin region looking for the dunes sagebrush lizard.
“It was striking how diverse and fragile the ecosystems are down in what I think a lot of folks think of as a pretty beat up landscape,” he said.
State mulls ownership of historic Nob Hill church – Oliver Uyttebrouck, Albuquerque Journal
An iconic church that has graced Albuquerque's Nob Hill neighborhood for three-quarters of a century may soon belong to the state of New Mexico.
The pastor of Immanuel Presbyterian Church posted a statement on the church's website this week announcing that the congregation voted in December to donate the historic building in lieu of paying for costly renovations.
"On December 14, 2025, the congregation voted unanimously to donate the building to the State of New Mexico, affirming a shared commitment to preserving this treasured site as a public asset for future generations," the Rev. Drew Henry said in the statement posted Monday.
"We expect the donation process to be completed in the first half of 2026," he wrote.
The decision was prompted by the high cost of needed renovations to the historic structure.
"Following a comprehensive professional architectural assessment, the congregation has arrived at the difficult conclusion that it does not have adequate resources to complete the extensive renovations required to preserve the historic structure," said Henry, who could not be reached for further comment this week.
Gov. Michelle Lujan Grisham and two state lawmakers said this week that the church's future has been under discussion for more than a year as the congregation has wrestled with the issue of renovations.
"We are in discussions about an acquisition of this church property, but the details are still being negotiated," Michael Coleman, a spokesman for Lujan Grisham, said in an email. He offered no additional details about the proposed donation.
The Territorial Revival structure in the heart of Albuquerque's historic Nob Hill neighborhood at 114 Carlisle SE, just south of Central, was listed on the National Register of Historic Places in 2011.
The legendary New Mexico architect John Gaw Meem was hired in 1948 to design the church, which was built in three phases from 1949 to 1956, according to U.S. Department of the Interior records. The original 10,000-square-foot building was dedicated in 1950 and a 3,000-square-foot classroom addition was completed in 1951.
The 25,000-square-foot sanctuary and bell tower, dedicated in 1956, serve as a performance venue for musical groups. A 2,333-pipe Casavant Frères organ was installed in 1965.
State Sen. Antoinette Sedillo Lopez and state Rep. Marianna Anaya, both Albuquerque Democrats, secured $200,000 in capital improvement funding in 2025 to study potential uses for the building.
"This is a highlight of my district," Sedillo Lopez said of the church. "I will do, personally, what I can as a state senator to preserve that building and to open it up to the community."
The state would need to identify a fiscal agent, likely Albuquerque or Bernalillo County, because the state can't provide funding to a church, she said. Sedillo Lopez said she has been aware for more than a year that Henry is seeking ways to preserve the building.
"He really wants the community to make use of this wonderful space, and so does the congregation," she said.
Anaya said the congregation wants the property to become a community space. Anaya and Sedillo Lopez jointly sought capital improvement funding, she said.
"We funded it with the understanding that it was to be developed into some sort of a community center," Anaya said.
A key decision facing the congregation is the future of its ministry, Henry said in the statement.
"The congregation is currently engaged in a thoughtful process to discern the future shape and location of its ministry, with additional details to be shared as decisions are finalized," Henry said. "While we leave our church building with certain sadness, we also do so with gratitude, hope, and joyful anticipation for the new life and purpose it will serve in the community."