New Mexico plots greater spending, from tuition to Medicaid

SANTA FE, N.M. (AP) — An expansion of nonmerit scholarships to college and greater spending to safeguard abandoned oil wells in New Mexico are among the governor’s new spending priorities, amid a windfall in state income linked to federal pandemic relief and petroleum production.

September marks the outset of the Legislature’s grueling budget writing process for the year beginning on July 1, 2022.

Several executive agencies overseen by New Mexico Gov. Michelle Lujan Grisham are making the case for expanded services. Lujan Grisham spokesman Tripp Stelnicki said Tuesday that the inclination is to “aim high” and “make the most of the opportunity we have to finish the work of rebuilding state government services after so many years of forced austerity.”

The Human Services Department is suggesting a $100 million spending increase on Medicaid and related mental health services alone, for total annual general fund spending of $1.26 billion on the program.

State income for the coming fiscal year is expected to outpace routine annual spending obligations by $1.4 billion, or 19% of annual general fund spending obligations.

That leaves lawmakers more money than ever before to spend on education, roads, public safety and other government programs.

Detailed spending targets from the Legislature’s lead budget writing committee — geared toward programs with efficient and measurable outcomes — are still months away from publication.

The state agency that oversees oilfield permits and cleanup activities says its $82 million budget proposal would increase capacity for on-site inspections and plug more orphan oil and natural gas wells. It was allotted less than $70 million for the current budget year ending June 30, 2022.

The Environment Department is seeking a $7.1 million increase in general fund spending, a roughly 45% increase over current year spending of $16 million. The funds would help the state reduce greenhouse gas emissions from the transportation sector by implementing new fuel efficiency standards and boosting hydrogen infrastructure for fuel cell vehicles that have no tailpipe emissions, the Environment Department said in a statement.

Environmental regulators also are under pressure to expand food safety oversight to cannabis infused products known as edibles, as the state legalizes recreational cannabis sales by April 1, 2022.

The Human Services Department says its suggested Medicaid spending increases will bring in $6.1 billion to the state in annual federal matching funds.

Post-partum Medicaid benefits would extend for one year after childbirth, up from six months. More than 70% of births in New Mexico are covered by Medicaid insurance for people living in poverty or on the cusp.

Statewide Medicaid enrollment has grown by more than 100,000 people since the outset of the pandemic in March 2020. About 44% of the population relies on Medicaid and the related Children’s Health Insurance Program.

Some lawmakers have warned that federal recovery aid won’t be around forever, urging colleagues to increase the state’s reserves to guard against future budget shortfalls.

State higher education officials say they are seeking a $48 million appropriation to the governor’s “opportunity scholarship” initiative that kicks in after other grants and scholarship to help attain tuition-free college. That would more than double current appropriations.