SANTA FE, N.M. — New Mexico’s universal child care program is tens of millions of dollars over budget despite being in operation for only a few months.
Gov. Michelle Lujan Grisham in September 2025 championed the expansion of state-subsidized child care to include families in any income bracket, moving beyond those who demonstrate financial need. The program took effect Nov. 1, 2025, and was codified into law March 1 through Senate Bill 241, also known as the Universal Child Care bill.
SB 241 allocated $700 million in taxpayer funds to the New Mexico Early Childhood Education and Care Department, or ECECD, for the program through 2031.
However, the program is costing far more than anticipated. The state is experiencing higher enrollment numbers than first projected, and fiscal year 2026, which ends June 30, is almost $50 million over budget, according to Courtney.
Jon Courtney, deputy director of the New Mexico Legislative Finance Committee, said expenditures have grown to the point where the state will exceed its 2026 budget for the program. The total budget allocated for child care this fiscal year was $433 million.
Courtney noted that both enrollment numbers and the cost per child have increased, making universal child care more expensive than it was at this time last year. He said the key question going forward is how fast the program is expected to grow.
Since a large percentage of enrollment growth is coming from higher-income families, Courtney acknowledged concerns that the neediest families may be crowded out by those opting into the program for convenience rather than necessity. He likened it to a resource-allocation issue, noting a single working parent may have less time and fewer resources to navigate the enrollment process than a two-parent household.
Courtney cited a Dec. 9, 2025 LFC policy brief on child care assistance that emphasized the need for long-term spending forecasts. The brief projects that if all families currently paying privately were to enroll, annual costs would nearly double — rising to $849.7 million, an increase of nearly $400 million over current fiscal year spending. While Courtney does not anticipate overspending rising to that degree in the near future, he said the outcome will be determined by enrollment rates.
Julia Sclafani, a spokesperson for the ECECD, said in a statement that 18,100 children have enrolled in the program since November. About 44% of those enrollments came from families who were not previously eligible for subsidized care. Sclafani said ECECD is working with the Department of Finance and Administration and the LFC “to find a solution to ensure there is no shortfall.”
During a post-session budget review in the New Mexico House of Representatives on April 26, LFC Director Charles Sallee said the cost per participant has “exploded” in recent years to upwards of $12,000.
“Depending on the age will drive that overall average where you can have infants in certain types of center-based care at $20,000,” Sallee said. “That’s a pretty significant subsidy that you’ve now enacted for families regardless of their income level.”
Addressing program spending, Sallee said latest projections show the program is overspent by at least $40 million and will “finish the year basically overdrafting the general fund potentially.”
The ECECD used $28.7 million in federal funds to partially offset the overspending, according to the LFC.
Courtney confirmed the ECECD is aware of the issue and has been meeting with the LFC to discuss solutions. The LFC has not yet issued a formal recommendation calling for program changes.
