Good afternoon,
When we talk about New Mexico’s future, we start with the big picture.
Our three major investment funds — the New Mexico Land Grant Permanent Fund, the Severance Tax Permanent Fund, and the Early Childhood Trust Fund — all operate on the same principle: convert one-time wealth into lasting, recurring revenue. Together, they form a balanced short- and long-term fiscal strategy.
The Land Grant Permanent Fund, created at statehood, supports public education and other beneficiaries. Built largely from oil and gas royalties and other revenue from state land, it has grown through constitutional protections and professional management. Voters recently approved increasing the education distribution from 5 percent to 6.25 percent to strengthen early childhood programs — meeting today’s needs while protecting tomorrow’s opportunity.
The Severance Tax Permanent Fund, established in 1973, captures the value of oil and gas production to protect against volatile commodity cycles. During recent booms, excess revenues were directed into the fund to prepare for future production declines. Projections show that strategy beginning to offset actual oil and gas revenues in the 2030s.
The Early Childhood Trust Fund represents a new-generation model — taking windfall revenues above the five-year average and turning temporary spikes into permanent, recurring support for children and families.
Across all three funds, discipline and oversight ensure transparency and long-term stability. The central tension remains the same: how much do we spend today, and how much do we preserve for future generations?
That same balance guided the 2026 legislative session.
Actions taken this session reflect significant policy improvements aimed at better outcomes for New Mexico. The General Appropriation Act, House Bill 2, in conjunction with corporate income tax changes in Senate Bill 151, increased recurring general fund revenues by $339 million — about 3 percent — addressing key needs while reflecting responsible growth.
Despite economic headwinds, revenue forecasts from the Consensus Revenue Estimating Group show reserves remaining strong at approximately 27 percent, reinforcing the state’s solid financial position.
House Bill 2 makes significant investments in education, including nearly $50 million for career technical education programs, expanded out-of-school time initiatives, and funding to cover 80 percent of school employee healthcare costs through House Bill 47. It also provides $3 billion from all funding sources for nonrecurring purposes — including $100 million for State Fair redevelopment, along with major investments in housing, water infrastructure, quantitative initiatives, and higher education student support and athletic facilities.
The Democrat Legislature supported universal childcare through Senate Bill 241, providing recurring funding for wage supports and career ladders within the childcare workforce. The Republicans looked on this as a huge increase of big government. The promise of qualified educators in each child care center is unrealistic due to the fact we are 700 qualified teachers short in our public schools today. Too many promises that are unattainable.
In public safety, we funded two new judgeships in the first and second judicial districts, provided recurring funding for the Office of the Child Advocate, strengthened the Organized Crime Commission, and supported the Department of Public Safety’s intelligence-led policing initiative.
We passed a $1.3 billion capital outlay package and Senate Bill 240 to support a new School of Medicine at the University of New Mexico and fund state and local projects. We approved a $1.5 billion transportation bond package in Senate Bill 2 to address roads and bridges across the state. A republican amendment requires DOT annually to report what roads will be improved and completion status of previous year’s projects.
Tax reform under Senate Bill 151 also increased capacity by $110 million to provide a 1 percent salary increase for state employees and educators. This was done by decoupling state tax code from federal tax code enacted in the big beautiful bill. NM will one of the few states who will disallow one year deduction of R&D for such the much talked about quantum computing. Please read analysis done by NMTax dept under SB 151 and you determine who was the winner and loser.
We also passed medical malpractice reform establishing caps on punitive damages — addressing a major concern for physicians practicing in New Mexico and helping stabilize healthcare access.
At the same time, we increased penalties for those who assault law enforcement officers, provided tools for mandated treatment for unstable and dangerous offenders, defeated extreme energy mandates that would have harmed our economy, and protected constitutional rights.
Whether managing permanent funds or shaping policy, our responsibility is stewardship — strengthening education, improving healthcare access, enhancing public safety, investing in infrastructure, and maintaining fiscal discipline.
By focusing on long-term stability and responsible growth, we are turning today’s resources into lasting opportunity for the people of New Mexico.
Thank you for your attention