Senate Finance Committee backs $162.5 million plan to backfill state nutrition benefits; orders LFC evaluation

The Senate Finance Committee voted to pass Senate Bill 1 as amended, approving a package of appropriations intended to backfill a state-run nutrition benefit while the federal funding picture remains unsettled.

Chairman Munoz opened the special-session hearing by saying the bill would ensure New Mexicans have food for the holidays. Sponsor senators described the bill as a mix of reversions, fund balances and transfers that together total approximately $162,502,771 to support the state's nutrition benefit program.

The bill’s sponsor said the state will transfer roughly $22,000,000 each week to load SNAP replacement cards for Monday morning distribution; because the state fills benefits weekly and the federal government disburses monthly, the chair cautioned that short timing overlaps could occur if federal payments resume mid-week.

“Kerry Armijo,” the agency secretary identified in the hearing, told senators that USDA guidance on Friday allowed states to prepare files and issue 100% of benefits, but subsequent court action required some states to claw funds back. “We are in the middle of a very confusing legal storm,” she said, urging caution that final outcomes will depend on court rulings and federal guidance.

Senators pressed staff for the bill’s fiscal mechanics, including how much the governor has used from the appropriation contingency fund and the operating reserve. Committee staff (Charles) said recent transfers and emergency draws have brought contingency and reserve activity near $390 million across fiscal years 2025–26 and that some transfers moved money from the operating reserve into appropriations accounts as an accounting measure after fiscal year close-out.

Members also questioned the program’s payment error rate. The secretary said New Mexico’s payment error rate is about 15% and that much of that reflects allowable waivers during the public health emergency (for example, waived interviews and interim reporting) that increased measured error rates when agencies later reconciled records. The secretary said the agency has a plan of policy, systems and staffing changes to reduce the error rate and avoid future federal cost-sharing penalties.

An amendment offered by Senator Pat Woods and seconded by Senator Pete Campos directed that a portion of unexpected appropriation balances be used by the Legislative Finance Committee (LFC) to conduct an evaluation of the state’s administration of the Supplemental Nutrition Assistance Program. Woods said the evaluation would help identify sources of error and tighten controls; he cited a roughly 14.6–15% error rate and quantified that as “about $3,000,000 per week,” or roughly $156,000,000 per year, in erroneous payments.

Debate on the amendment focused on whether the LFC already had this work in its plan, whether $50,000 the amendment set aside was necessary, and the political risks of creating a new talking point. Senator Jeff Steinborn was the lone recorded ‘no’ on the amendment; it passed 10–1 on roll call. The committee then moved to pass the bill as amended and recorded a final passage vote of 11–0.

The committee’s action leaves the state prepared to continue weekly state-funded benefit disbursements if federal payments remain interrupted. Committee members and staff said they expect continued legal and federal guidance developments and possible reimbursement efforts by the federal delegation, but gave no firm guarantee that federal reimbursement will be automatic.

Next steps: with the committee’s do-pass recommendation, the bill moves forward in the legislative process. The amendment will ask the LFC to produce an evaluation of SNAP administration and report back per the LFC’s procedures.