Keller withholds signature on Albuquerque budget over spending dispute

Mayor Tim Keller refused to sign Albuquerque’s fiscal year 2027 budget before it goes to state regulators, marking the first time in his tenure that he has not approved the city spending plan. The move leaves the $1.47 billion budget intact, but it also signals a deeper fight over how much the city can safely spend as Bernalillo County’s largest government heads into a year of tighter revenues and uncertain federal support.

The dispute centered on the Albuquerque City Council’s substitute budget, which added about $11.8 million in spending above Keller’s proposal. City officials said that difference was built on an overly optimistic revenue forecast that could put core services at risk if collections come in lower than expected. The adopted plan still preserved priorities the administration backed, including employee raises, public safety funding and continued support for city services.

Council Budget Chair Renée Grout defended the council’s approach, saying members checked with the New Mexico Department of Finance and Administration and were told the added revenue estimate was realistic and well supported. The council’s changes were not limited to raises. They also restored 272 city positions that the mayor had deactivated and increased reserves, making the fight about staffing and structural balance as much as about the top-line total.

Keller’s budget office released the proposed FY27 plan in early April 2026, framing city finances as under pressure from inflation, higher health-care costs, cuts in federal funding and rising demand for services. The city says the operating budget is $35 million less than the prior year and is meant to reduce overhead while protecting mission-critical work. City budget materials also warn that tariffs, cuts to federal jobs, cuts to grant funding and international conflicts could weaken business investment and consumer confidence.

Keller stopped short of a veto, so the budget now moves on to review by the state Department of Finance and Administration instead of going back to the council. The City Clerk’s office officially published the approved budget on June 8, and it is set to take effect July 1, the start of Albuquerque’s fiscal year 2027, which runs through June 30, 2027.

The clash fits a pattern. Last year, Keller issued four vetoes on the fiscal year 2026 budget, setting up another round of council debate over whether to override them. The city’s annual objectives resolution, which is mandated by the City Charter and Budget Ordinance, gives the council another formal role in shaping priorities during the year. For residents, the practical question is whether the added spending holds up under real collections or turns into another fight over cuts, reserves and city staffing once the new fiscal year begins.