Fiscal Year 2028 State Agency Budget Requests

Fiscal Year 2028 State Agency Budget Requests

by Dr. Andrew Miner, DPA, Director, State Budget Division

The State Budget Division (SBD) of the Department of Finance and Administration is pleased to make New Mexico state agency budget requests for Fiscal Year 2028 available to the public. Publishing budget requests allows for full civic participation in the budget-making process which affects the lives of all New Mexicans.

Budget Request Process
State agencies submit budget requests to both SBD and the Legislative Finance Committee (LFC) annually. This year, the deadline for submission was September 1, 2026. The SBD team reviewed all budget requests for technical accuracy. In the coming months, executive and legislative staff will use the requests to develop their respective budget recommendations prior to the Legislative Session beginning in January 2027. The Executive Budget Recommendation will be the first budget presented by the new Governor who will be elected in November and assume office January 1, 2027.

This group of budget requests does not include public higher education institutions, which are due later this fall. In FY27, higher education institutions have a cumulative general fund budget of approximately $1.34 billion.

High-level Summary 
The collective general fund increases requested by agencies total $867.6 million, an 8.8% increase over an FY27 operating budget of $9.82 billion. Submitted for the second time in September, this includes the FY28 request for public school support, which totals $5.0 billion, a 3.0% increase over FY27.

Agencies with the largest requested increases include:

• The Department of Justice ($14.3 million, 83.3%)
• The Office of the State Engineer ($18.1 million, 44.2%)
• The Early Childhood Education and Care Department ($49.9 million, 15.3%)
• The Health Care Authority ($178.5 million, 8.7%)
• The Department of Workforce Solutions ($31.5 million, 205%)
• The Children, Youth and Families Department ($100 million, 35.1%)
• The Higher Education Department ($41 million, 21.8%)

Agency requests reflect higher rates for services provided by the General Services Department and the Department of Information Technology, anticipated increased costs for state employee health insurance premiums, and various priorities that are detailed in each agency’s budget request documents. The worksheet Summary of Received General Fund Requests shows each agency’s FY27 general fund operating budget alongside its FY28 request. Dollar amounts are presented in thousands; for example, $5,000.0 represents $5 million.

The total FY27 general fund operating budget for New Mexico is $11.16 billion. As a rule of thumb, each 1% increase in the FY28 budget will equal roughly $116 million over FY27.

Nonrecurring Requests
Agencies also submitted requests for special appropriations (one-time funding) on September 1, with requests for supplemental and deficiency appropriations to address current or prior-year shortfalls due on October 30.

In New Mexico, supplemental appropriations are additional funds allocated by the Legislature during the fiscal year to cover unexpected expenses or emergencies. Deficiency appropriations are specific supplemental funds provided to address shortfalls in a department or program’s prior-year budget to ensure compliance with generally accepted accounting principles.

The total general fund requested for nonrecurring special appropriations amounts to almost $2.2 billion. Some of the largest requests include:

• $100 million to the Site Readiness Fund
• $75 million to the Local Economic Development Fund (LEDA)
• $100 million to the Opportunity Enterprise Commercial Development Fund
• $100 million to the Research Development and Deployment Fund
• $50 million to the Film Production Revolving Loan Fund, contingent on legislation creating the fund
• $50 million for land acquisition for wildlife conservation and outdoor recreation
• $150 million to support fire mitigation and work to reduce wildfire risk to communities and watersheds statewide
• $50 million to the Kiki Saavedra Senior Dignity Fund, contingent on legislation making the fund a permanent endowment
• $50 million to the strategic water supply program fund
• $50 million to the 50-year Water Action Plan Implementation Fund
• $100 million for heavy transportation equipment
• $250 million for roadway maintenance
• $65 million for the cleanup New Mexico beautification program
• $50 million for transportation fund project grants
• $50 million for an endowment that supports the University of New Mexico Health Sciences Center School of Medicine’s student recruitment and retention

Also submitted on September 1, nonrecurring general fund requests for public school support included $20 million for educator clinical practice programs and $10 million for summer internships for high school students.

Additionally, agencies submitted $500 million in requests for pilot projects funded through the Government Results and Opportunity (GRO) Fund, including:

• $10 million at the Law Offices of the Public Defender to transition selected cases from base rates to hourly rates for contract attorneys
• $16.5 million to the Office of the State Engineer to fund acequia projects statewide
• $6 million to the Early Childhood, Education and Care Department for quality improvements and implementation across early pre-K programs
• $30 million to the Aging and Long-Term Services Department to implement a pilot performance-based funding model across the state’s three agencies on aging
• $219 million to the Department of Workforce Solutions for housing development, affordable housing, transitional housing, homelessness initiatives and the expansion of housing services statewide

For a complete list of received nonrecurring requests, refer to the Received Special Appropriation Requests worksheet. Details regarding many of these requests may be found within specific agencies’ budget request submissions.

In 2024 the Consensus Revenue Estimating Group (CREG) adjusted the definition of “new money” to properly account for the large amount of nonrecurring spending in the past few years due to large increases in available revenue. Under the new definition, the new money forecast of $924 million for FY28 by the CREG in August 2026 assumes that the Legislature will appropriate $2.67 billion, the same amount as FY27, for nonrecurring purposes in FY28, which would include any fund transfers or general fund capital spending. The $924 million is thus available for increases in recurring or nonrecurring spending or for saving to add to general fund reserves.

What’s Next?
SBD invites the public and stakeholders to carefully examine the operating budget and nonrecurring budget requests submitted by state agencies. Legislative and executive leadership will use this information to craft the Fiscal Year 2028 budget prior to and during the 2027 legislative session.