Spending plan funds higher education, child care, transportation, housing and water projects statewide

Organ Mountain News report

SANTA FE - Gov. Michelle Lujan Grisham has signed New Mexico’s $11.1 billion state budget for fiscal year 2027, along with capital outlay and tax legislation approved during the 2026 legislative session.

According to the governor’s office, the general fund budget represents a $339.5 million increase — about 3.1% — compared to the fiscal year 2026 budget while maintaining reserves at 26.4%.

The spending plan funds higher education, universal child care, transportation projects, housing initiatives and natural resource programs across the state.

“Over the last seven years, we have fundamentally redefined New Mexico’s future by prioritizing historic investments in universal child care, health care, public safety and more while achieving record job growth and the nation’s largest drop in child poverty,” Lujan Grisham said in a statement. “We’ve built a strong foundation of opportunity for New Mexico families, and while this budget marks a massive leap forward, our work is far from finished.”

“I’m signing this budget today as a commitment to New Mexico’s long-term success and a promise to keep moving our state upward,” the governor added.

Notable spending items in the budget include:

• $300 million for major higher education projects
• $210 million for transportation programs and projects
• $255 million for water and natural resource initiatives
• $160 million for the first year of universal child care funding
• $150 million for quantum initiatives
• $110 million for statewide housing initiatives
• $35 million for career technical education programs
• $29 million for reading and math intervention programs
• $20 million for education fellows programs

Capital outlay

The governor also signed Senate Bill 240, the state’s capital outlay bill, and House Bill 248, which authorizes general obligation bonds.

Together, the measures provide more than $1.5 billion for infrastructure projects including schools, roads, housing, community facilities and water conservation projects.

Highlighted projects include:

• $546 million for the University of New Mexico School of Medicine
• $75 million for the behavioral health institute in Las Vegas, New Mexico
• $20 million for state parks
• $20 million for public safety projects
• $17.6 million for a reforestation center in Mora County
• $10 million for a homeland security emergency operations center
• $10 million for a child care facility revolving loan fund
• $10 million for early childhood facilities at higher education institutions

Tax package

Lujan Grisham also signed Senate Bill 151, an omnibus tax package that includes several credits and deductions aimed at workforce recruitment, housing and journalism.

Provisions include tax credits for physicians, an extension of the high-wage jobs tax credit and a gross receipts tax deduction for affordable multifamily housing construction.

The legislation also creates income tax credits for local news publications and employers of local journalists.

In addition, the bill includes a 1% pay increase for state employees.

According to the governor’s office, the legislation does not raise taxes on New Mexico families.