LFC: New Mexico has funded early childhood, but implementation gaps persist; ECECD proposes universal eligibility and supply investments

The Legislative Finance Committee (LFC) presented its Early Childhood Accountability Report, concluding that while the Legislature has substantially increased early childhood funding, implementation problems limit results for children and families.

LFC program evaluator Dr. Allegra Hernandez told the Legislative Health & Human Services committee that "funding levels remain sufficient and that implementation remains an issue" across program areas. The report traces major budget growth—early childhood funding rose from less than $200,000,000 in fiscal year 2012 to $918,000,000 in fiscal year 2026—but finds mixed outcomes and declining capacity in some parts of the system.

LFC staff highlighted several specific metrics: 32 childcare slots per 100 children under age 2 statewide, a drop in registered home‑based providers (reported in the presentation as roughly 12,000 in 2019 versus about 3,000 in 2023), and persistent disparities in teacher preparation between school‑based and community‑based pre‑K. Garrett Mosley, an LFC program evaluator, said pre‑K funding grew 418% since FY 2018 (from $52,300,000 to $272,000,000 in FY 2026) and that state‑funded pre‑K continues to show positive near‑term assessment results.

The report also flagged child welfare concerns: infant maltreatment and child maltreatment indicators were well above national averages and LFC said New Mexico had not yet drawn federal Family First Prevention Services Act (FFPSA) funds because a federal FFPSA plan had not been approved. LFC estimated that implementing a multilevel response system with evidence‑based models could yield cost savings between $4,900,000 and $10,800,000 if implemented with fidelity.

Responding to the report, Dr. Haley Hines, director of policy, research and quality initiatives at the Early Childhood Education and Care Department (ECECD), defended the department’s strategic approach and described rule changes the agency has proposed to expand eligibility and strengthen supply. Hines said the department has proposed a model "in which families will be eligible for childcare assistance regardless of their income," and paired that eligibility change with supply‑building measures: a revolving loan fund to support provider capital projects, targeted slots for infants and toddlers from low‑income families, higher reimbursement rates for home providers and efforts to rebuild registered home‑based care.

On the question of whether the proposal is truly "universal," Representative Block asked whether asset tests in the proposed rule would block access for some families. Hines clarified, "folks with million dollar assets... can still be eligible. They just have to report them," adding that asset reporting is a federal requirement and that co‑payments are currently waived for all income levels.

Lawmakers pressed both LFC and ECECD on measurement and data: LFC pointed to Istation and CLASS scores that show short‑term literacy gains for pre‑K participants and to longer‑term outcomes such as graduation rates, while ECECD said it is developing a new data system to improve monitoring. Committee members also discussed workforce issues and the department’s plan to increase reimbursement rates based on a cost model, and to expand credential pathways and wage supplements.

What happens next: lawmakers asked staff to share proposed reimbursement tables and requested follow‑up information about the FFPSA plan and the state’s Medicaid billing practices for FIT services. The committee set a five‑minute question clock during the hearing; there were no formal motions or votes recorded on the report at the meeting.