New Mexico allocates $91M for employee salary increases in fiscal year 2026

House Bill 2, introduced by the New Mexico House of Representatives on February 21, 2025, aims to provide a significant salary increase for various state employees. The bill proposes an average salary increase of four percent for employees in budgeted positions who have completed their probationary period and demonstrated satisfactory job performance. This increase is set to take effect in the first full pay period after July 1, 2025.

The bill allocates a total of approximately $112 million from the general fund for fiscal year 2026 to cover the costs associated with these salary increases. The funding is distributed across several sectors, including:

1. **Legislative Employees**: $942,600 for permanent legislative staff, including those working for the legislative council service and various legislative committees.
2. **Judicial Employees**: $12,913,600 for permanent employees within the judicial system, including judges and public defenders.
3. **Classified Service Employees**: $35,129,600 for employees governed by the Personnel Act, as well as those in the New Mexico state police career pay system.
4. **Higher Education Staff**: $44,980,600 for nonstudent faculty and staff at public postsecondary institutions.
5. **Specialized Educational Institutions**: $2,176,700 for staff at the New Mexico military institute and schools for the blind and deaf.

The introduction of House Bill 2 has sparked discussions among lawmakers regarding the financial implications of the proposed salary increases. Supporters argue that the bill is essential for retaining qualified personnel in state services, particularly in the face of rising living costs. However, some lawmakers have raised concerns about the sustainability of such increases amid budget constraints.

As the bill progresses through the legislative process, its potential impact on state finances and employee morale will be closely monitored. If passed, House Bill 2 could set a precedent for future salary adjustments across various state sectors, reflecting a commitment to improving compensation for public service employees in New Mexico.