Overview
On February 19, New Mexico’s state legislature became the first one to adjourn their 2026 legislative session. In the second year of a legislative biennium, the New Mexico state legislature meets for thirty fast-paced days to discuss a limited range of issues, including budget and appropriation bills as well as bills brought forward pursuant to a special message of the governor. In all, 686 bills were introduced as well as 126 resolutions. By the end of the session 127 bills and resolutions were passed by the legislature.
Here is what you may have missed.
Education
In her State of the State address delivered at the beginning of the year, Governor Michelle Lujan Grisham spotlighted education as a priority for her final year as the state’s head executive. She brought forward a proposal to boost literacy and math requirements in New Mexico schools. The legislature responded and passed SB 37 by a unanimous vote in both chambers. The bill creates the High-Quality Literacy Instruction Act which implements high-quality instructional materials for K-3 literacy instruction and K-12 literacy interventions and aligns state practices with science of reading principles. It also establishes targeted support for families of students with additional reading needs. Although the bill has not yet been signed, the governor has indicated she plans on enacting the bill. “SB 37 builds on my administration’s long-term strategy to give every New Mexico child a solid foundation for educational success by improving literacy education in our schools,” said Gov. Michelle Lujan Grisham. “New Mexico has boosted student reading proficiency significantly over the past four years and this literacy initiative will accelerate that progress. I thank the legislature for its overwhelming support of this legislation, and I look forward to signing it into law.”
The legislature also passed HB 253 which was signed by the governor on February 25. The measure revises oversight of distance learning in the state. It takes effect immediately.
Federal Impact
Lawmakers around the country are grappling with the fallout of the passage of the One Big Beautiful Bill and New Mexico is no exception. In addition to budget provisions highlighted below, the legislature passed SB 151 which is a comprehensive tax bill. The main highlight of the bill is that it decouples New Mexico’s corporate income tax from several provisions of HR 1, including business interest deductions. The state’s Taxation and Revenue Department anticipates that decoupling will increase recurring general fund revenue by up to $60 million in FY 2027 and $120 million in FY 2028. The bill, which developed into a quasi-tax omnibus as the legislative session progressed, also extends the high-wage job tax credit to jobs created before July 1, 2036. More states are anticipated to take action addressing potential revenue impacts of the One Big Beautiful Bill before the year is up.
Budget
The legislature passed the state’s general appropriation bill on February 18. The $33.4 billion 2027 fiscal year budget contains the following appropriations:
- $30,000,000 from the health care affordability fund for Medicaid expansion population coverage.
- $25,000,000 to the Health Care Authority for affordability programs to prevent coverage loss resulting from federal spending cuts.
- $38,100,000 to the Health Care Authority to offset the expiration of enhanced federal premium tax credits enacted in the Inflation Reduction Act of 2022 that removed the 400% of the federal poverty level income limitation for eligibility for advance premium tax credits for coverage purchased through the health insurance exchange, contingent on the federal government not extending the enhanced federal premium tax credits.
- $6,600,000 to the Health Care Authority for the Supplemental Nutrition Assistance Program state supplement. This appropriation is targeted to assist elderly and disabled populations.
- $110,000,000 for research, development, and deployment, $40,000,000 of which must go toward quantum initiatives and $40 for advanced energy initiatives.
What’s Next
Governor Lujan Grisham has until March 11 to act on legislation otherwise these bills will be pocket vetoed. The governor was asked the day before adjournment if she anticipates calling a special session. “It’s a little early. One thing about a special session: I don’t believe in calling legislators together to disagree. There has to be a meaningful path forward. I’d like them to be more serious about crime.” Governor Lujan Grisham expressed similar sentiments around crime legislation at the end of the 2025 legislative session.
In November, voters will go to the polls in New Mexico to elect a new governor as Governor Lujan Grisham is term-limited from running again. Former United States Secretary of the Interior Deb Haaland is currently the favorite to replace her, polling about twenty percentage points ahead of the remainder of the field in the Democratic primary. State Attorney General Raul Torrez is running for reelection to his position against Republican challenger Samuel Kane. All seventy seats in the New Mexico House of Representative will also be up for election in November.
To stay up to date on what will happen in the remaining 45 state legislative sessions this year, reach out to Stateside discuss legislative monitoring and reporting options.
