Jan. 5—SANTA FE — The Legislative Finance Committee introduced its budget proposal for the upcoming fiscal year on Friday, one day after Gov. Michelle Lujan Grisham released her own.
Although similar to Lujan Grisham’s proposal, the LFC’s version was slimmer, with just a 5.9% budget increase compared to the executive’s 9.9%.
The budget recommendation totaled $10.1 billion — retaining enough reserves to inoculate against future budget cuts and keep revenues growing for the next several years, LFC representatives said.
“I think this is a very sound budget,” said LFC Chair George Muñoz at a Friday press conference. “It keeps the legislature … and the state of New Mexico able to grow over the next couple of years without having massive cuts.”
The allocation for public education retained the largest chunk of funding. The $4.4 billion recommendation was on par with the governor’s.
The LFC budget called for across-the-board raises for state employees totaling 4%. The governor’s pitch included a 3% raise for all state employees, plus bigger raises for state police and corrections, probation and parole officers.
A major difference between the two budgets was the creation of a $300 million “accountability and improvement” trust fund, which the LFC recommended as a way to set aside this year’s revenue as a long-term funding plan.
According to the recommendation packet, the program would “offer a chance to invest in new ideas,” like pilot programs.
The new budgeting tool would float funding evenly over four years while monitoring the performance of the program.
“The Executive looks forward to working with the Legislature on a budget that lifts up all New Mexicans through continued investments in priority areas,” said Lujan Grisham spokesperson Maddy Hayden in a statement. “We are just beginning our review of the LFC recommendation and at this time do not have information on how the brand-new budgeting concept developed by the LFC of an ‘Expendable Trust’ would work.”
Both budgets endorsed the New Mexico Legacy Fund, a dedicated state fund for conservation signed by Lujan Grisham in 2023. The LFC recommended a $300 million appropriation, which Muñoz said “filled the bucket” for the fund; Lujan Grisham recommended $250 million.
“This is history in the making,” said Dr. Brittany Fallon, western lands senior policy manager at Western Resource Advocates, in a statement responding to the proposals.
Much of this year’s budget will come from oil and gas revenue. The industry is funding about half of the budget proposed by the LFC — a reliance Muñoz called “dangerous.”
But LFC Vice Chair Nathan Small said the budget includes insurance against market volatility, and both representatives highlighted investments in workforce programs intended to boost education levels and employment in new industries.
The legislative session begins Jan. 16. Next week, state agencies will approach the House Appropriations and Finance Committee to discuss their budget requests. The hearings allow for public comment on Zoom and in person at the New Mexico State Capitol.
