Governor Michelle Lujan Grisham has released her executive budget recommendation for fiscal year 2027, proposing $11.3 billion in spending to safeguard New Mexico from potential federal funding reductions and to continue investments in universal child care. The proposed budget represents a 4.6% increase over the current year’s spending, with reserves maintained 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 is the governor’s final budget recommendation and builds on initiatives such as universal child care, free college tuition, and increased K-12 education funding.
For early childhood education, the budget allocates $606.4 million to maintain no-cost child care for all families regardless of income. It also includes $7.5 million to expand early prekindergarten by 500 children and $4 million for universal home visiting programs.
In K-12 education, recurring spending has risen by nearly 35% since 2019 under Lujan Grisham’s administration, with teacher pay increasing by more than 38%. The new proposal provides $42.2 million for universal school meals, $38.5 million for career technical education, $30 million for reading intervention programs, and $14 million dedicated to literacy support.
Higher education would receive a total of $1.48 billion under this plan, including $168 million for the Opportunity Scholarship program which has contributed to reversing declining college enrollment trends and supported over 20,900 graduates since spring 2024.
The health care section of the budget sets aside funds to address possible impacts from federal cuts: $92.9 million is recommended to provide Medicaid coverage continuity; an additional $81.1 million aims to keep health insurance affordable through BeWellNM; and $37 million is intended to offset reduced SNAP reimbursements.
Infrastructure proposals include nonrecurring investments such as $232 million toward water security projects aligned with the state’s long-term water action plan and another $100 million earmarked for road construction and maintenance statewide. Water appropriations feature allocations like $65 million for strategic supply funds and specific amounts set aside for Indian water rights settlements and aquifer monitoring efforts.
Public safety measures involve a certified compensation package with a recommended allocation of $13.5 million for law enforcement and fire response pay raises; other recommendations include funding felony warrant enforcement ($3 million) and maintaining Organized Crime Commission operations ($2.5 million).
Housing initiatives are addressed with proposed funding of $65 million toward affordable housing efforts across New Mexico along with an additional $45 million targeting homelessness programs.
The release comes ahead of the legislative session scheduled next month, allowing lawmakers time to review details before discussions begin.
“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.”
New Mexico State Executive operates as a governmental body focused on state administration within New Mexico (official website). Governor Michelle Lujan Grisham leads these efforts alongside Lieutenant Governor Howie Morales (official website). The executive branch promotes public service careers while prioritizing areas such as education advancement—through programs like early childhood initiatives—and community sustainability (official website). Infrastructure tracking systems are also part of its ongoing initiatives (official website), supporting both economic development goals and combating food insecurity throughout the state (official website).
Further information about the FY27 Executive Budget Recommendation can be found at:
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