SANTA FE — Governor Michelle Lujan Grisham today released a fiscal year 2027 executive budget recommendation that deploys $11.3 billion to protect New Mexico against federal spending cuts and to fully invest in universal child care while maintaining the state’s historically strong financial position.

The budget recommendation includes $11.33 billion in recurring spending — a 4.6% increase over current year spending. The recommendation keeps reserves strong at 30%, totaling $3.4 billion.

“This budget reflects seven years of disciplined investment that has transformed New Mexico,” said Lujan Grisham. “Even as we confront unprecedented federal funding challenges, we remain in the strongest financial position in state history. This budget puts that strength to work for families, students and communities across New Mexico.”

The FY27 proposal marks the governor’s final budget recommendation and builds on her administration’s signature achievements including universal child care, free college tuition and historic K-12 education investments.

Universal child care
The budget recommends $606.4 million in total spending to ensure New Mexico’s first-in-the nation plan to provide no-cost child care for every family regardless of income. Additional investments in early childhood education include $7.5 million to expand early prekindergarten by 500 children and $4 million for universal home visiting.

K-12 education
Since taking office in 2019, Lujan Grisham has increased recurring K-12 spending by 34.7% and raised teacher pay by more than 38%. The governor’s FY27 budget proposal builds on that solid foundation with $42.2 million to continue the healthy universal school meals program, $38.5 million for career technical education, $30 million for reading intervention and $14 million for early literacy and reading support.

Higher education
The budget includes $168 million in total spending for the Opportunity Scholarship, which has reversed a decade-long decline in college enrollment and produced more than 20,900 graduates since spring 2024. The budget proposal brings total higher education funding to $1.48 billion.

Health care and federal funding response
The budget recommends $92.9 million to provide health coverage for Medicaid enrollees who would otherwise lose coverage under the Trump administration budget cuts. It also proposes $81.1 million to keep health insurance affordable for New Mexicans purchasing coverage through the state’s BeWellNM exchange and $37 million to offset reduced federal SNAP reimbursements.

Infrastructure and water
The executive budget also proposes critical nonrecurring water and transportation investments, including $232 million for water security and implementation of the 50-Year Water Action Plan and $100 million for statewide road construction and maintenance. Proposed water appropriations include $65 million for the Strategic Water Supply Fund, $35 million for Indian water rights settlements and $22 million for aquifer monitoring and mapping. A proposed infusion to the New Mexico Match Fund of $60 million will ensure communities continue to be competitive for federal grants.

Public safety
Investments to strengthen public safety include $13.5 million for pay raises included in a certified law enforcement and fire response compensation package. The budget recommends another $3 million for felony warrant enforcement and $2.5 million to maintain Organized Crime Commission operations.

Housing
The budget recommends $65 million for statewide affordable housing initiatives and $45 million for programs combatting homelessness.

Today’s budget release comes one month before the start of the New Mexico Legislature, providing lawmakers and the public ample time to review the document.

“As I enter my final year as governor, I’m determined to continue improving the lives of all New Mexicans,” said Lujan Grisham. “I look forward to working with the Legislature to pass a budget that reflects our shared values.”

For more information:

FY27 Executive Budget Recommendation:
https://www.nmdfa.state.nm.us/wp-content/uploads/2025/12/FY27-Executive-Budget-Recommendation.pdf

FY27 Executive Budget Recommendation Budget in Brief:
https://www.nmdfa.state.nm.us/wp-content/uploads/2025/12/FY27-Exec-Rec-Budget-in-Brief-FINAL.pdf

Department of Finance and Administration FY26 Fund Balance Projection Report:
https://www.nmdfa.state.nm.us/wp-content/uploads/2025/12/DFA-FY26-Fund-Balance-Projection-Report.pdf