LEDE: Daniel (last name given in testimony as Daniel, LESC public school finance analyst) told the committee that a federal reconciliation bill signed July 4 is projected to reduce New Mexico’s Medicaid enrollment by about 88,000 people and SNAP enrollment by about 58,000 people — a change that could have cascading fiscal effects on school-based services and federal education funding.

NUT GRAF: Committee members were briefed on immediate and potential longer-term impacts: fewer Medicaid-enrolled students could reduce federal reimbursements that support school-based health and therapy services; fewer SNAP-certified households may lower federal meal reimbursements and affect Title I funding allocations; and the U.S. Department of Education’s programmatic review led to withholding roughly $44.8 million nationally from several K–12 programs for further review, the LESC update said. PED and LESC staff said they were surveying districts and schools about local impacts and that some funding is being held pending review or possible congressional rescission.

Key details: LESC presented estimates that reductions in Medicaid could affect roughly $96.1 million in federal payments for school-based student services (therapy, counseling, administrative Medicaid activities). SNAP changes could affect about $163.1 million in federal reimbursements for school meals and snacks and reduce the census used to allocate roughly $306.6 million pushed through the at-risk index in the state school funding formula. LESC also reported that $44.8 million in withheld federal K–12 funding affected 186 FTE statewide (10 at PED, 176 at districts and charters), and that about 25 states joined a lawsuit challenging the withholding. Nationally, staff said $6.8 billion of appropriated funds for K–12 programs underwent a programmatic review and were temporarily withheld.

LESC’s Daniel urged the committee to consider the uncertainty of federal flows when planning state responses and suggested mechanisms such as contingency or nonrecurring appropriations to sustain programs if federal dollars are delayed or lost. PED assistant secretary Greg Frosthead said PED is issuing surveys to LEAs to gather up-to-date impacts and guidance; he said the department planned to release a fresh survey on the day of the briefing. Frosthead noted the situation is “rapidly changing” and that PED would share the collected data with the subcommittee and with LESC staff.

Quotes: “The Medicaid changes could impact $96,100,000 in federal payments to schools for student services,” the LESC analyst said. Greg Frosthead told the committee his office was “releasing… a survey of the LEAs to ask what the impacts have been” and planned to update legislators as data arrive.

Ending: PED and LESC staff said they will continue to gather district-level reports, distribute guidance about carryover funds to help districts start the school year, and work with the legislature’s federal funds stabilization subcommittee. Committee members asked for frequent, detailed updates given the near‑term calendar for school hiring and program commitments.