by Kris Nordstrom, MPP
Director of Research
August 27, 2026

New Mexico lawmakers should have enough revenue to build upon their recent work supporting families and children. At the August 26 meeting of the Legislative Finance Committee, the Consensus Revenue Estimating Group (CREG) released their first estimate of how much money the state should expect to be available for the upcoming 2027-28 fiscal year (FY 28).

Composed of staff from the Department of Finance and Administration, the Taxation and Revenue Department, and Legislative Finance Committee, CREG experts analyze tax collections, economic trends, and changes to tax laws to estimate how much money legislators will have available for the upcoming year’s state budget.

This August report provides New Mexicans the first look at state fiscal conditions for FY 28. 

What does the report say?

  • The Legislature is expected to have $924.2 million of General Fund availability for FY 28, a 6.7% increase over the current fiscal year
  • The revenue increase is driven by growth in investment revenue from New Mexico’s permanent funds. 
  • State revenues are boosted by high oil prices. Oil and gas revenues are helping compensate for soft underlying economic growth in the rest of New Mexico’s economy.
  • Collections from corporate income taxes have been strengthened by “decoupling” from recent changes to the federal tax code. Decompling added back $56 million to state coffers in FY 27, growing to an estimated $91 million in FY 28
  • The forecast for state revenue in future years remains positive despite risks to future economic growth. The national economy is becoming increasingly driven by the AI industry and its associated stock market returns. 
  • Here in New Mexico, unemployment is rising, driven partly by big decreases in federal government employment. Much of New Mexico’s economic activity has been driven by construction in oil producing counties such as Doña Ana, Eddy, and Lee counties.
  • New Mexico’s long-term fiscal health remains strong. The state’s savings reserves are currently sufficient to endure an economic downturn without requiring big cuts to government services.

Why is it important?

  • $924 million of availability provides the Legislature with substantial room to strengthen support for New Mexican families with General Fund revenue. 
  • To a certain extent, this figure might underestimate revenue availability. The current year budget includes $2.7 billion of nonrecurring spending. Without additional legislative action, this spending will not continue into FY 28. If all of this spending is allowed to sunset, then new spending availability would actually total $3.6 billion.
  • Either way, state revenue availability should allow lawmakers to: 
    • Provide capital funding and wage supports to increase the number of childcare providers, giving more families have access to high quality childcare;
    • Increase teacher pay;
    • Provide additional support to New Mexicans who have been harmed by federal cuts to SNAP and Medicaid; and
    • Explore additional policies to improve family economic security such as baby bonds and direct prenatal and infant cash payments.
  • The state’s reliance on volatile oil and gas revenues highlights the need to continue efforts to diversify New Mexico’s tax base and ensure that corporations and wealthy New Mexicans are paying their fair share.
What comes next?
  • Agencies, legislators, and gubernatorial candidates will be using this information to shape their plans for the 2027 Legislative Session. 
  • The CREG will release updated estimates in December that will serve as the basis for budget development in the 2027 legislative session in January and February.
  • Advocates should encourage lawmakers to build upon their work supporting New Mexican families (particularly those facing growing economic precarity) and improving the progressivity and diversity of the state’s tax base.