New Mexico Projects $485M Revenue Growth Despite Federal Cuts

New Mexico is projected to see a $485 million increase in General Fund revenue for fiscal year 2027, reaching approximately $14.11 billion, despite expected federal budget cuts under President Donald Trump's administration that will reduce state revenues by about $206 million between FY26 and FY30. The state's Consensus Revenue Estimating Group, including economists from various departments, highlighted that the robust revenue growth will help the state maintain healthy reserves of $3.94 billion, or 36.4% of recurring appropriations, and protect essential services amid federal funding reductions. Governor Michelle Lujan Grisham emphasized that this strong revenue outlook provides crucial financial stability and could enable a special legislative session to allocate the surplus funds. Department of Finance and Administration Secretary Wayne Propst affirmed New Mexico's solid fiscal position and capacity to address external fiscal challenges, including potential gaps in funding for low-income health insurance and food assistance. Lawmakers and state officials view the new revenue as a positive sign after years of economic growth and are preparing to use it to offset the impact of federal policy changes such as adjustments to tax deductions and business taxes. Overall, New Mexico's financial outlook remains strong despite the federal government's significant cuts in state funding.