Fiscal Year 2026 Executive Budget Recommendation
by Dr. Andrew Miner, DPA, Director, State Budget Division
The fiscal year 2026 Executive Budget Recommendation totals $10.9 billion in recurring general fund appropriations, an increase of $720 million, or 7.0%, over the fiscal year 2025 operating budget. The recommendation reflects an increase of 5.3% to agency operating budgets and public-school support, or $548 million, over FY25 and additionally accounts for a $172 million statewide compensation package.
The recurring Executive recommendation increase fits responsibly within the $892 million in total new money as published by the Consensus Revenue Estimation Group (CREG) in December 2024. The recommendation utilizes available recurring revenue to support increases in operating costs for all state agencies, a $172 million compensation package for state agency, higher education and public-school employees, and numerous Executive priority initiatives as detailed in the following sections, while maintaining projected general fund reserves at high levels that will support New Mexico’s long-term finances.
The recommendation also includes approximately $2.3 billion in nonrecurring general fund spending. Further, the recommendation accounts for a total general fund capital package of $850 million. Considering all factors, the recommendation leaves estimated general fund reserves at 36.3% at the end of fiscal year 2025 and 30.4% at the end of fiscal year 2026.
The Executive recommendation utilizes available new money to make strategic investments in state agency programs and employees while acknowledging the reduced future revenue growth projected by CREG. While such a large amount of new revenue may not be available in future years, the Executive budget recommendation is a responsible plan that adheres to sound long-term fiscal planning.
The general fund comprises approximately 33.0% of the FY26 Executive budget recommendation, consistent with recent years. The remainder of the budget recommendation comes from federal funds and other state funds, with the total recurring recommendation amounting to $33.1 billion from all funds. For a list of all state agency-recommended budgets, see Table 1 (general fund) and Table 2 (total funds) in the Executive recommendation document.
For more detailed budget explanation, check out the “Budget in Brief.”