Governor Signs $11.1 Billion Budget, Securing Capital Projects for Hidalgo County

New Mexico's largest state budget in history landed with Governor Michelle Lujan Grisham's signature on March 11, committing $11.1 billion in general fund spending for fiscal year 2027 and unlocking more than $1.5 billion in capital outlay funds through Senate Bill 240 and House Bill 248 for projects spanning schools, roads, housing, community centers, and water conservation across every corner of the state, including Hidalgo County.

The general fund figure represents a $339.5 million increase, roughly 3.1 percent, over the fiscal year 2026 budget, while keeping reserves at 26.4 percent. "Over the last seven years, we have fundamentally redefined New Mexico's future by prioritizing historic investments in universal child care, health care, public safety and more while achieving record job growth and the nation's largest drop in child poverty," Lujan Grisham said in a statement. "We've built a strong foundation of opportunity for New Mexico families, and while this budget marks a massive leap forward, our work is far from finished." She added: "I'm signing this budget today as a commitment to New Mexico's long-term success and a promise to keep moving our state upward."

Capital outlay highlights under SB240 include $546 million for the University of New Mexico School of Medicine, $255 million for water and natural resource initiatives, $210 million for transportation programs, $175 million for statewide housing and homelessness initiatives, and $75 million for the behavioral health institute in Las Vegas, N.M. The package also directs $20 million each to state parks and public safety, $17.6 million for a reforestation center in Mora County, and $10 million apiece for the homeland security emergency operations center, a child care facility revolving loan fund, and early child care facilities at higher education institutions. The governor's office had characterized the capital outlay total as roughly $1.2 to $1.5 billion; multiple media accounts placed the figure above $1.5 billion. Both characterizations reflect the scope of investment flowing through SB240 and HB248.

Beyond capital projects, the broader budget allocates $300 million for major higher education projects, $160 million for the first year of universal child care, $150 million for quantum initiatives, $35 million for career technical education, $29 million for reading and math intervention programs, and $20 million for education fellows programs.

Lujan Grisham also signed Senate Bill 151, the omnibus tax package. SB151 includes physician income tax credits, an extension of the high wage jobs tax credit, a new gross receipts tax deduction for affordable housing construction, and income tax credits for local news publications. The package also provides a 1 percent pay increase for state employees and, according to the governor's office, does not raise taxes on New Mexico families.

The signing came on the last day Lujan Grisham could act on legislation passed during the last regular session of her tenure. She exercised line-item veto authority on both the budget bill and the capital outlay legislation. Rep. Nathan Small, D-Las Cruces, chair of the House Appropriations and Finance Committee, put the total vetoed amount from the budget at approximately $21 million. "The fact that $21 million out of $11.1 billion was vetoed really speaks to the strength of our — and we're really proud in the House — of a transparent, really collaborative, intense process," Small said. Helen Gaussoin, spokesperson for the Legislative Finance Committee, noted that most of the line-item vetoes "look kind of typical of the kind of things that she cuts."

Among the items cut: $500,000 for phase two of a feasibility study for a lowrider museum in Española, $4 million for creative industries grants, nearly $1 million for capital improvements to the Department of Wildlife's Red River fishery, and $650,000 to settle the Ohkay Owingeh cyber attack. Sen. Leo Jaramillo, D-Española, expressed frustration over the lowrider museum cut. "When you see the country celebrating lowrider culture, even knowing that those forever lowrider [postage] stamps are coming out this March and that the state that proudly has the lowrider capital right here, is ignoring our subculture," Jaramillo said. "It's disappointing."

For Hidalgo County specifically, the full project-by-project detail of SB240's capital outlay appropriations will determine which local investments cleared the process. The bill's statewide language covers schools, roads, housing, community centers, and water conservation, all pressing priorities for a rural border county where water infrastructure and road conditions remain persistent challenges. The complete SB240 project list will confirm exactly which Hidalgo County line items survived to the governor's desk.