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NM Education Dept Faces $35M Shortfall After Overpayment
12 Dec
Summary
- New Mexico education department has a $35 million budget shortfall.
- The shortfall stems from an overpayment to Gallup-McKinley County Schools.
- Lawmakers plan legislation to prevent similar budget issues in the future.
New Mexico's Public Education Department is confronting a significant $35 million budget shortfall, revealed by Secretary Mariana Padilla to the Legislative Finance Committee on December 12, 2025. The deficit originates from an overpayment to Gallup-McKinley County Schools after the district terminated its contract with an online learning provider. Consequently, 3,000 students transitioned to other online programs, yet Gallup-McKinley continued to receive state funding for them based on prior enrollment.
Lawmakers expressed strong disapproval of the situation, with Legislative Finance Chair Rep. Nathan Small indicating that the requested funds would not be provided. Instead, legislation is expected in 2026 to prevent such "abuses." Senator George Muñoz voiced particular anger, vowing to take assertive measures to recover the funds, even suggesting direct confrontation with the school district.
Beyond the immediate crisis, Padilla also presented the department's broader budget request, which includes an $81 million increase for recurring general fund spending. Priorities include addressing teacher vacancies, supporting student nutrition programs with an projected 58 million meals served, and covering operational costs like building rent and healthcare. The department also seeks funding for ongoing legal costs related to the Yazzie/Martinez case.
