Committee advances bill to increase minimum distribution from Early Childhood trust to $500 million

Representative (presenter) introduced the Early Education and Care Fund Transfers Act, saying the bill would raise the trust fund’s minimum annual distribution to at least $500,000,000 and “allow [the Early Childhood Education and Care Department] to increase access to service for 10,000 more children.”

The bill’s sponsor and Elizabeth Graginsky, secretary of the Early Childhood Education and Care Department (ECCD), told the committee the fund — endowed with $300 million in 2020 and managed by the state investment council — has grown substantially and projections now show distributions could exceed $500 million by 2028 or 2029. “There are children in our state right now eligible for services that we are not able to serve them,” Secretary Graginsky said, arguing a larger minimum distribution would let the department expand pre-K, home visiting and child-care access.

Why it matters: ECCD officials said the increase would support a mix of direct services and infrastructure — universal pre-K expansions for 3- and 4-year-olds, more home visiting, and investments to help child-care providers pay staff and run sustainable programs. The department’s fact sheet presented to the committee estimates the additional distribution could serve roughly 10,000 children statewide.

Discussion and concerns: Committee members repeatedly pressed ECCD and Legislative Finance Committee staff on the department’s ability to absorb a rapid increase in funding without creating service gaps. Representative Dowd pressed the department on workforce impacts tied to proposed changes in infant/toddler ratios; ECCD staff replied that lowering group sizes and ratios would reduce infant and toddler slots and that their analysis estimated about “800 less infant and toddler slots by lowering the ratio.” Graginsky said supply expansion and workforce development must proceed together: “We have to increase access and improve quality.”

Members also asked for local breakdowns and proof of capacity. Representative Baca requested the split of the 10,000 additional slots by setting; ECCD replied the estimate would be about 3,000 pre-K seats, a little over 6,000 infant and toddler child-care slots and roughly 1,000–2,000 additional home-visiting slots. Lawmakers discussed past reversions and how unspent trust-fund program money now reverts to the trust corpus under updated statute language — a safeguard ECCD and LFC staff referenced when discussing fiscal controls.

Implementation detail: ECCD said it has contracted a statewide child-care supply-and-demand study with the Low Income Investment Fund to map community-level needs and that the New Mexico Finance Authority (NMFA) administers a low-interest revolving loan program for child-care facilities (NMFA has $1.8 million now; HB2 would add $10 million to that program if enacted). ECCD told the committee many of the department’s federal and state revenue streams already fund program operations and that approximately 90–95% of ECCD dollars go to local programs rather than to agency overhead.

Vote and next steps: Representative Herrera moved a do-pass recommendation for HB 71; Representative Little seconded. The committee recorded the motion as passed and the staff reported the final roll as 12 affirmative, 3 negative. Committee discussion noted the Legislature will still decide the appropriation amounts; this bill only changes the distribution mechanism that makes additional money available to appropriate.

Ending: ECCD and LFC staff said they will provide district- and community-level saturation data and the department’s annual outcomes reports to the committee so lawmakers can track capacity, workforce metrics and reversions as additional funds are distributed.