House Appropriations committee adopts ‘catch‑up’ budget cleanup, moves $3.4B into reserves

The House Appropriations & Finance committee adopted a three‑page “catch‑up cleanup” scenario and an adjusted general fund financial summary after a morning hearing that reviewed line‑by‑line language and funding changes to dozens of agencies.

The committee voted by voice after a motion from Vice Chair Dixon, seconded by Representative Herrera; Chair Small announced, "Seeing no opposition that motion has been adopted." The clean‑up package moves one‑time and language changes, restores targeted funding on several priorities and adjusts transfers while preserving an estimated FY26 reserve of roughly 31.2 percent of the general fund.

The catch‑up cleanup consolidates items that did not make it into earlier agency budgets, specials or supplementals and includes both language clarifications and new one‑time appropriations. Director Amanda Breiding told the committee, "We're gonna be starting with the HAFC catch up cleanup scenario," and then walked members through each line item. Director Charles Saleem reviewed the general fund financial summary and described it as "your balance sheet," saying projected FY26 revenues total about $13.6 billion and appropriations total about $13.7 billion, with the scenario drawing on reserves to cover nonrecurring spending.

Key funding and language changes included: - $3,000,000 in general fund for the Taxation & Revenue Department to replace legacy tax‑return software. - $4,000,000 to the Department of Finance and Administration for a law enforcement recruitment and retention fund. - $2,000,000 added to the animal welfare trust fund (bringing the proposed total in the scenario to $7,000,000) tied to House Bill 113 language. - $10,000,000 restored for the FAIR plan at the Office of Superintendent of Insurance as a backstop for that insur‑ ance program. - Site readiness for economic development reduced from about $35,000,000 to about $24,000,000 to free roughly $11,000,000 for other priorities. - $10,000,000 for talent recruitment and retention in high‑demand fields and $7,000,000 for the Local Economic Development Act (LEDA). - $40,000,000 added for the Environment Department’s strategic water supply program (linked to brackish water legislation described by a sponsor as supporting deep brackish water projects). - A $20,000,000 local solar access fund line item contingent on passage of House Bill 128, separated out of a larger community benefit fund. - Adjustments tied to the community benefit fund and trade‑port funding (an item reduced from $100,000,000 to $90,000,000 contingent on House Bill 19). - Education changes: a reduction of a two‑year hold‑harmless for public school support to one year (a $5,000,000 reallocation), $2,000,000 for special education initiatives, and $3,000,000 for the STEM network. - Health care and behavioral health adjustments: $22,300,000 in other‑state funds from the Health Care Affordability Fund for insurance marketplace affordability programs and $10,000,000 in HCAF for flexible affordability programs; the adopted catch‑up also reallocated $8,000,000 from one HCA appropriation to other behavioral health items. - Multiple higher education and research awards including pilot law enforcement academy funding at UNM‑Gallup ($400,000 for two years), $1.8 million for the Quantum Institute (including $500,000 for first‑year fellowships), and funds for NMSU and NM Tech RPSP priorities.

Members asked clarifying questions on eligibility, contingency language and duration. Representative Herndon pressed for procedural clarity about where catch‑up items originated; Director Breiding explained these items include previously adopted agency budgets, specials and supplementals and "anything that didn't make it into those other 2 things you adopted." Representative Vincent asked whether the FAIR plan money is a backstop; Breiding said, "as it's written, would be the backstop for the fair program." Representative Brown confirmed reductions and allocations apply to certified community behavioral health centers and acute care centers.

Director Saleem summarized the fiscal impact: projected FY26 revenue growth of about 2.6 percent, recurring and nonrecurring appropriations that draw on existing reserves, and a combined general fund balance held at approximately $3.371 billion across reserve accounts, producing an estimated 31.2 percent reserve level for FY26 under the adopted scenario.

After the voice vote adopting the cleanup scenario, Chair Small appointed a small technical committee to finalize edits: Ranking Member Chatfield and Vice Chair Dixon will work with Director Saleem and Director Breiding on any technical changes before the scenario moves to the floor. Vice Chair Dixon made the motion, saying, "I would move that the committee adopt the proposed catch up cleanup changes and the adjusted general fund financial summary." Representative Herrera seconded the motion.

The catch‑up cleanup package is primarily one‑time funding and language adjustments; several items are contingent on separate bills (for example, the local solar access fund and trade‑port funds), and committee members were reminded that full bill language and additional committee consideration remain available as those measures proceed. Chair Small closed the meeting after noting the committee's work would continue with the Senate and thanked staff for their work.