New Mexico Governor, Michelle Lujan Grisham, has proposed a significant increase in general fund spending for the upcoming fiscal year. The budget plan, totaling $10.5 billion, aims to address various areas of concern such as housing opportunities, childhood literacy, health care access, and electric vehicle purchases. With an anticipated multibillion-dollar surplus, largely driven by oil and natural gas production in the Permian Basin, the governor plans to allocate approximately $950 million in additional funds over current annual obligations.

Affordable housing is a major priority for the governor, who has proposed a one-time spending of $500 million to expand housing opportunities through down-payment assistance and financing affordable housing and related infrastructure. Additionally, $40 million would be used to launch a statewide homelessness initiative. This initiative comes as voters in Santa Fe approved a tax on mansions to fund affordable-housing initiatives, reflecting the frustration with surging home prices in the fast-growing city.

The proposed budget also includes a significant increase in spending on public education. A total of $283 million, or 6.8% of the budget, would be allocated to public education, making it the largest chunk of annual general fund appropriations. The aim is to bolster specialized literacy programs and establish a state literacy institute. Furthermore, additional funds would be used to extend annual instructional time in public schools across the state. However, Republicans in the legislative minority have expressed opposition to the expansion of public school calendars.

Addressing the need for childcare and early preschool, the governor's budget proposal aims to add 2,000 slots for infant and toddler childcare and expand early preschool by 1,380 slots through increased state spending. The proposal also includes bolstering aid to children being raised by grandparents.

Despite sustained spending increases on public education, legislators have expressed frustration with the current results. The statewide share of students reading at their grade level is only 38%, while math proficiency stands at 24%. The high school graduation rate in the state is also below the national average at 76%. Governor Lujan Grisham has acknowledged these challenges and pledged to spend responsibly and with accountability.

The budget proposal also includes pay increases for various sectors. Workers at executive agencies and public schools statewide would receive a 3% increase, while corrections officers and state police would see larger increases of 8% and 14%, respectively.

Economists for state agencies have cautioned that New Mexico's income surge is slowing down but far from over. Lawmakers must consider how much to spend now and how much to set aside for the future, especially in case the demand for oil diminishes. Despite this, the governor's budget outline allows for up to $500 million in leeway for legislators to approve tax cuts and incentives that promote the adoption of electric vehicles and other low-pollution vehicles. New Mexico regulators have recently accelerated the timetable for automakers to phase out gas- and diesel-burning cars and trucks, raising concerns about the affordability of electric vehicles in a state with high poverty rates.

While many other states are experiencing a decline in budget surpluses and considering cuts to taxes, New Mexico's budget proposal reflects a continued focus on addressing critical issues and investing in the state's future. The Democratic-led Legislature will develop its own competing spending plan before the 30-day legislative session begins on January 16. Governor Lujan Grisham retains the power to veto any budget provisions approved by legislators.