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Division of Vocational Rehabilitation warns missed state match risks millions in federal funds
Summary
DVR officials told the Appropriations & Finance Subcommittee the division risks losing federal vocational rehabilitation grant dollars if the state does not provide additional recurring match funding.
The New Mexico Division of Vocational Rehabilitation (NMDVR) told the Appropriations & Finance Subcommittee that insufficient state matching funds have caused the state to forfeit federal vocational rehabilitation (VR) grant awards in recent years.
Interim Director Kendra Karp and agency leaders said the division leverages federal VR dollars at roughly a four‑to‑one match: for every $1 in state match, the federal government will provide up to about $4. The agency calculated that missed matching capacity led to roughly $6.5 million in federal funds that went unclaimed over the past two years.
DVR requested an additional $451,300 in recurring state general fund to fully match the federal award. The executive recommendation funded the full $451,300 request. The Legislative Finance Committee recommended a lower increase—$251,300 less—leaving a $251,300 gap between the LFC and executive recommendations. DVR warned that the LFC recommendation could result in forfeiting roughly $900,000 in federal VR funds and would limit direct services, assistive technology and supported employment for New Mexicans with disabilities.
Agency officials detailed how federal funds are used to support pre‑employment transition services for students (eligible beginning at age 14), workplace integration, assistive technology loans and supported employment. DVR said pre‑employment transition services are provided statewide through staff and contractors, reaching between 1,500 and 2,500 students directly in many years and up to 7,000 students when contracted services are included.
Analysts and agency staff described staffing and expenditure dynamics: DVR has high vacancy rates that complicate delivery and historically the Legislature has not provided the full requested match. LFC noted that the recommendation still increases general fund for DVR by about 3% over FY25 and that both LFC and the executive substantially increase client services funding compared with FY25.
Committee members expressed support for DVR’s mission and concern about leaving federal dollars unclaimed. Representative Luhan and others urged staff and analysts to keep the issue under review; Representative Little noted that direct services can be provided by both staff and contractors.
The committee adopted the LFC recommendation for DVR’s operating budget.
