Ledes from the Land of Enchantment

NM fiscal experts outline plans to track record spending by state agencies

The “once-in-history” money approved by the 2023 New Mexico Legislature is ready to spend, and the Legislative Finance Committee is tracking the agencies and projects while building priorities for the next year before lawmakers return in January.

Oil and gas revenues boosted the budget by more than $3.6 billion – even as New Mexico is paying more in state funding for historic wildfire and flooding damages from climate change. This means more money for education, and the state agencies that oversee everything from agriculture to workforce development.

As part of a post-session review, the Legislative Finance Committee staff – which are full-time fiscal analysts who provide recommendations and oversight – presented a 60-page workplan to an interim committee panel filled with lawmakers from both the House and Senate finance committees.

The presentation  lays out the timeline for reports overseeing hundreds of millions the state is spending in programs in education, healthcare, prisons, natural resources and more.

The point of the document is to get feedback from lawmakers for both the watchdog reports, but also outline budget priorities for the 2024 session, said Charles Sallee, the deputy director of the agency.

“I want to emphasize these are draft staff proposals, we welcome feedback from members not only at this hearing, but afterwards,” he said.

Sallee gave previews of what the LFC was planning to examine over the interim session, and what presentations lawmakers can expect over the next six months.

Education funding

First up, in higher education, Sallee said because of the state’s Opportunity Scholarship, which pays tuition for degree-seeking New Mexico residents, the legislature has two responsibilities.

“The state is not only paying for instruction and general funds – the basic operations of our universities,” he said. “But we’re also like the parent paying the tuition cost for everybody as well.”

Tied into education is workforce development, including looking at the value of dual credits – or gaining college credit in high school.

“Building out the workforce is a theme from agency to agency,” Sallee said. “Either needing to hire people internally, or people in the fields that they’re deploying resources to.”

Statue in front of the Roundhouse in Santa Fe in December 2021. (Original photo by Austin Fisher with crop and edit by Marisa Demarco / Source NM)

In K-12, Sallee said examining how funding impacts engagement, attendance and behavior issues are a top priority. He said there’s almost $232 million in non-recurring funding for education programs, and the LFC has to determine which ones need to continue, find a stream of funding, or end.

Noted in the work plan is an evaluation of how spending in public schools since the Martinez-Yazzie v. State of New Mexico decision has impacted the “deficiencies highlighted in court findings.”

That comment refers to the 2018 decision, where a district court judge found the state violated its constitutional mandate to provide adequate education to low-income, Hispanic, Native American and disabled students.

Finally, the committee will take a hard look at child care assistance, the state’s largest early childhood program.

Health care

Priorities in the interim include looking for more insight into Medicaid spending, and behavioral health programs.

New federal laws will require a single, unified department in the state’s Human Services department to be responsible for regulation, policy and purchasing health care.

The LFC plans to present how to consolidate three divisions across three agencies to form the new department in December.

Since the New Mexico Department of Health has eliminated the waiting list for people with developmental disabilities for services, Sallee said there needs to be regulatory oversight to go with the expansion.

He pointed to data showing the state run health facilities have fewer individuals receiving services, resulting in a potential fiscal crisis. The report showed this issue as ongoing.

“This is where we’re running into financial problems,” Sallee said. “You heard in the financial report that they’re about half empty and not bringing in revenue and are possibly going to be short at the end of the fiscal year.”

Prisons and courts funding

The LFC will look at parole revocations, which account for one-third of new admissions into New Mexico prisons – the vast majority of those are for substance use.

“Prisons don’t provide great substance treatment,” Sallee said. “If that’s the reason people are being sent back to prison, what are other alternatives that can be a lower cost and get better outcomes to communities?”

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Natural resources 

The LFC will be watching the rollout for plugging orphan oil and gas wells.

New Mexico received more than $44 million in federal funding and pledged $290 million in state money to clean them up. Despite that, the LFC said the program “lagged” this year. The report said the state Energy Minerals and Natural Resources Department needs to commit resources to the project.

Also on the radar is $75 million one-time funding for the State Engineer’s office over the Texas v. New Mexico lawsuit, and the Lower Rio Grande located below Elephant Butte. The LFC prioritized “long-term solutions,” to address interstate compact issues.

Sallee added the LFC will be monitoring the impact of $100 million dollars set aside for fire response in northern New Mexico communities impacted by the Hermit’s Peak-Calf Canyon wildfires.

Those emergency funds from the state had no applicants Source NM reported in April.

During the next six months, the LFC will meet in different places across the state, according to a draft calendar. All meetings are available to watch remotely via a webcast.



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