Universal child care bill passes Senate after debate over price tag, future sustainability

SANTA FE — New Mexico could tap up to $1 billion from an oil-fueled state trust fund to prop up Gov. Michelle Lujan Grisham's universal child care initiative over the next five years, under a bill approved Thursday by the state Senate.

The measure, Senate Bill 241, passed the chamber on a 25-15 vote after several hours of debate — and a fire alarm that prompted a brief evacuation of the Roundhouse — and now advances to the House with less than one week left in this year's 30-day legislative session.

One Republican, Sen. Gabriel Ramos of Silver City, joined Democrats in voting in favor of the measure, while other GOP senators voted in opposition.

Sen. George Muñoz, D-Gallup, the bill's sponsor, said the plan would increase economic opportunity for working families in New Mexico, which has long struggled with high poverty rates, while still providing financial safeguards.

"We live in an era of working families, where both partners in a marriage have to work," Muñoz said.

Specifically, the legislation would enshrine in state law eligibility and application requirements for the universal child care program, which Lujan Grisham announced in September. New Mexico is the first state to provide state-subsidized child care for all working families, regardless of income levels.

The Democratic governor on Thursday described the Senate vote as a "historic step" toward ensuring all families have access to affordable, quality child care.

"For too long, parents have been forced to choose between their careers and caring for their children, and businesses have struggled to keep workers because families can't find reliable care," Lujan Grisham said in a statement.

She also said universal child care would bolster the state's economy, which already posted the nation's 12th-highest rate of job growth in 2025, according to the U.S. Bureau of Labor Statistics.

But Republicans expressed concern about the cost of the program — an estimated $160 million in the coming budget year — and its future sustainability given an uncertain economic outlook.

Sen. Nicole Tobiassen, R-Albuquerque, described universal child care as a "behemoth program" during Thursday's debate, while also raising questions about future revenue volatility.

Another GOP senator, Craig Brandt of Rio Rancho, sought to rewrite the bill by providing families with a stay-at-home parent or legal guardian up to $10,000 per child. 

"What we know is when a child is raised by the parents, the child does better throughout their lifetime," Brandt said.

But that attempt was rebuffed by the Senate's Democratic majority, with Muñoz saying it could lead to fraud and misuse of taxpayer dollars.

That prompted a pointed retort from Senate Minority Leader William Sharer, R-Farmington, who said universal child care could itself lead to rampant fraud in New Mexico. He compared the program to Minnesota's child care system that has come under intense scrutiny in recent months.

The New Mexico bill was unveiled last week to codify the state's universal child care program, which state officials acknowledge will require roughly 5,000 additional early childhood workers in order to meet statewide demand. It was modified in a Senate committee to include a steady funding source to pay for universal child care — at least through 2031.

Specifically, the bill would allow up to $1 billion to be diverted from an early childhood trust fund that was created in 2020. The fund has seen its value skyrocket over the last several years — from $300 million to nearly $11 billion at the start of this year — thanks to record-high oil production levels in southeast New Mexico.

The bill also contains certain "triggers" that, if sprung, would allow co-pays to be charged to higher-income families and child care wait lists to be implemented. Those steps would be triggered under certain economic situations, such as elevated inflation rates and a downturn in oil prices.

The co-pays would only apply to working families making more than 600% of the federal poverty level. That amount is currently $198,000 per year for a family of four.

Past research by Legislative Finance Committee analysts has found that state-provided child care has led to increased wages for parents, but has not found it improves educational outcomes for children.

But backers of the bill say the legislation would build off the state's recent efforts to create a cradle-to-career pathway, while also making New Mexico a more attractive state for working families.

"This is just the next natural step for what we're trying to accomplish," said Senate Majority Whip Michael Padilla, D-Albuquerque.

Already, lawmakers appropriated funding to provide no-cost child care to 32,000 children last year, but that number is projected to increase to 58,000 children by the 2029 budget year under the universal child care program, according to a legislative analysis of the bill.

In addition, roughly 10,000 more New Mexico children have enrolled in the state's child care assistance program since universal child care took effect in November, Lujan Grisham said in her State of the State address last month.

Dan Boyd covers state government and politics for the Journal in Santa Fe. Follow him on X at @DanBoydNM or reach him via email at dboyd@abqjournal.com