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Senate creates Medicaid trust fund to stabilize future matching funds
Summary
The New Mexico Senate passed Senate Bill 88 to create a $300 million Medicaid trust fund seeded by treasury overnight deposits; lawmakers said the fund will help stabilize state Medicaid spending if federal funding changes.
The New Mexico Senate on Wednesday passed Senate Bill 88, creating a Medicaid trust fund seeded with interest from overnight treasury deposits and intended to provide a reserve if federal Medicaid funding drops.
Sponsor Senator Scherer described the measure as a long-term stabilization vehicle: “So this is the Medicaid trust fund. And like other trust funds that we've done, this one's a $300,000,000 trust fund. It's, the the money comes from the overnight deposits at the treasury. The interest earned off of that. We're expecting $290,000,000 to go into there,” she said on the floor.
The bill authorizes the state to invest the corpus and draw a fixed percentage for Medicaid purposes; proponents said the trust fund would smooth the state budget against possible federal reductions. “Medicaid is our biggest cost to the budget other than education,” Senator Munoz said during debate, adding the fund “helps us level that budgeting process” and describing potential federal match leverage if state funds are available.
Senators across the aisle and in the majority framed the measure as a prudent, proactive step. Senator Hickey said planning is needed because federal policy shifts can reduce funds that flow through waivers and other mechanisms. Senator Wirth praised Medicaid’s role in covering hundreds of thousands of New Mexicans and said the trust fund is “a very smart proactive move.”
An amendment correcting a labeling error from the finance committee—Senate floor amendment No.1—was adopted on voice vote before final passage. In final action on the floor the bill passed the Senate and was transmitted as passed.
Votes at a glance: Senate Bill 88 as twice amended passed the Senate (final tally recorded on the floor). The bill moves next according to regular legislative processing.
The measure’s backers said the trust fund will grow over time and can be tapped under a defined trigger if federal dollars decline. Opponents did not prevail in recorded floor debate.
Senate action on the bill followed committee work and one friendly technical amendment; sponsors emphasized the fund’s purpose was fiscal stabilization, not immediate program changes.
