State Policy · NM
New Mexico Economist Warns Childcare Trust Fund Faces 2048 Depletion
New Mexico's chief legislative economist told lawmakers on Oct. 21 that the state's Early Childhood Education and Care Fund will be depleted by 2048 without changes, jeopardizing the state's universal childcare program. The fund grew to $11 billion from oil and gas surplus revenue, but a 2025 diversion of $1.9 billion to the Medicaid Trust Fund and Behavioral Health Trust Fund, plus up to $700 million directed to the new universal childcare program, pushed payouts above returns. The economist recommended finding alternative recurring revenue sources, such as the general fund, and slowing withdrawals to restore solvency. Lawmakers are expected to address the issue in the next legislative session.
Why it mattersState Medicaid officials should note that the 2025 diversion to the Medicaid Trust Fund is directly tied to this solvency warning, meaning future legislative fixes could affect funding flows between the childcare and Medicaid trust funds.