House appropriations committee hears economic development policy preview; adopts LFC budget recommendation

The House Appropriations & Finance committee heard an overview of the Economic Development Department's strategy and budget during a policy preview that emphasized site readiness, quantum and advanced-technology sectors and rural economic opportunities. The committee voted to adopt the Legislative Finance Committee (LFC) recurring-budget recommendation for the department.

LFC analyst Julissa Rodriguez opened with a summary of recent appropriations, saying the Legislature's recurring general-fund support for the department rose substantially in recent years and that nonrecurring appropriations exceeded $100 million across multiple sessions. Rodriguez told members that the department planned to use recent recurring funds for asset analysis, a university pitch award pilot, startup supports and site-preparation work, and that programs commonly used by the agency include the Local Economic Development Act (LEDA) and the Job Training Incentive Program (JTIP).

Rob Black, secretary-designate for the Economic Development Department, told the committee the agency was using a $5 million recurring increase from last year for targeted studies and pilot grants. "How do we create pathways to opportunity, to prosperity for New Mexicans," Black said, framing the work as an attempt to support higher-paying jobs statewide. He described two contracted studies: a $450,000 analysis of New Mexico's comparative advantage in advanced energy and a second study of five tech sectors (advanced computing, advanced energy, aerospace, bioscience and water technologies). Black also described a $500,000 regional-innovation application for quantum and noted federal and private interest in data-center and AI infrastructure.

Members pressed the department on several topics. Representative Chatfield argued for more investment in agriculture processing and value-added food production; Black pointed to LEDA and the Healthy Foods program as tools that could support meat inspection capacity and local processing. Multiple members queried site readiness and utility predeployment proposals; Black described two complementary proposals the department plans to pursue: a site-characterization program (executive recommended $24 million via GROW; LFC recommended a $35 million special appropriation) and a utility predeployment process to allow expedited regulatory review and access to NMFA low-interest loans for co-ops.

Questions also focused on technology sectors. Black and Alex Greenberg of the governor's office described New Mexico's strengths in quantum research tied to UNM, Sandia and Los Alamos National Laboratory. The department is seeking federal and private partnerships, including an NSF Regional Engine application and other federal hub funding. Black and Greenberg argued that relatively modest state investments (hundreds of millions) could position New Mexico competitively, while very large sums would be required to reproduce other states'scale semiconductor-style manufacturing.

Members raised concerns about data centers'water and electricity use and about permitting timelines that can delay development. Black said many modern data centers use closed-loop cooling reducing net water demand and argued that big projects can increase rate-base revenue and, if managed well, reduce per-residence electric costs. He also said the department will push for regulatory-transparency measures including publishing average permit times by jurisdiction so managers and the public can see where processes are slow.

Budget specifics discussed in the hearing included: - JTIP recurring funding (about $6.7 million) remained flat in both LFC and executive recurring recommendations. - The department's recurring general-fund recommendations differed modestly; the LFC recommendation that the committee adopted was smaller in total general-fund dollars than the executive recommendation by roughly $150,700. - The executive recommended an increase to the New Mexico Partnership contract (from approximately $1.0 million toward $1.6 million); LFC proposed a different structure and the two analysts reach consensus on many performance measures but differed on several contract and operational items. - Special appropriations (nonrecurring) were not voted on at this hearing; proposals included site readiness (executive $24M via GROW; LFC $35M special), funding for trails and outdoor programs, additional healthy-foods funding (executive $2M; LFC recommended none in recurring), creative- and film-related supports, and research-and-deployment funds.

The committee voted on the department's recurring-budget recommendation. Vice Chair Dixon moved adoption of the LFC recommendation; Ranking Member Chatfield seconded. The motion carried; Representative Pettigrew was recorded in opposition. The committee did not vote on nonrecurring special appropriations at this hearing and members were told those items will be considered in a later special-appropriations hearing.

The presentation and questions underscored member interest in: ensuring rural communities access site-preparation funds and utility predeployment; clarifying water and permitting impacts of data centers; strengthening food-processing capacity and healthy-food grants; and targeting investments in quantum and other tech sectors that build on New Mexico's university and lab assets. Black and staff committed to follow up on county-by-county breakdowns of past program investments, additional detail on New Mexico Partnership funding sources and on the timing and scope of proposed site-readiness and utility predeployment bills.

Looking ahead, the committee scheduled a separate session to consider special appropriations; several members asked for follow-up data and outreach to local governments, higher education and tribal partners about how proposed programs would be prioritized and administered.