With the legislative session starting next week, the legislature has made its budget recommendations for Fiscal Year 2025-26. The Legislative Finance Committee is recommending a 5.7% spending increase, as the state tries to balance high oil and gas revenues with prudent saving.
The LFC recommends spending $10.8 billion from the state's general fund, very similar to the amount Gov. Michelle Lujan Grisham asked for. Committee Chair Sen. George Muñoz (D-Gallup) said the state is in its best-ever financial situation, thanks to oil and gas revenue
"New Mexico is fortunate to have over $3.4 billion in new money," he said at a press conference at the Roundhouse.
Committee members outlined plans for an average 4% pay raise to state employees, more than about 3% proposed by Gov. Michelle Lujan Grisham. The committee wants to support improvements to mental health and addiction services, as Majority Leader Sen. Peter Wirth (D-Santa Fe) laid out.
"We're going to have a big focus on behavioral health, and the framework for that is built into this budget," he said.
One proposed project is a $40 million unit at the Behavioral Health Institute in Las Vegas that would focus on people with mental illness in the criminal justice system. The Governor has called for new laws to compel some people with mental illness into treatment. This issue of criminal competency is likely to be a key issue in the session.
Last year, the Legislative Health and Human Services Committee endorsed a proposal for a billion-dollar trust fund for behavioral health. That was not in the legislative budget, but Leader Wirth said a bill to create such a fund would be proposed in the session.
Asked about capacity to fill shortfalls if the incoming Trump administration reduces federal funding, Sen. Muñoz said, while this is a concern, he thinks it won't happen.
"If that does happen, we have the ability, we have the money to react to that, but we'll see what comes down the pipeline," he said.
Rep. Reena Szczepanski (D-Santa Fe) said that the budget did not differ very much from the governor’s proposals.
"We’re really not that far apart from the executive. That gives us a great basis to begin the legislative session,” she said.
Sen. Pat Woods (R-Broadview) criticized the budget, saying it did not prioritize reducing bureaucracy and would perpetuate the state's dependence on oil and gas.
"If we're going to an electric economy, we're going to have to start thinking about, how do we reduce some of the regulations?" he said.
He said that funding increases for agencies should be determined by performance.
