Senate Budget Cuts Weaken New Mexico’s Water Governance

February 18, 2025. Despite worsening scarcity, compact obligations, illegal water overuse, and the requirement to implement binding settlements, the Senate Finance Committee reduced funding for the Office of the State Engineer and Interstate Stream Commission — the only agencies with authority to manage the state’s water.

State Water Institutions Left Underfunded as Crisis Deepens

The Senate Finance Committee amended next fiscal year’s state budget in a manner that fails to provide the Office of the State Engineer (OSE) and Interstate Stream Commission (ISC) with the resources needed to confront New Mexico’s escalating water crisis. These agencies are the State’s primary institutions for managing water rights, ensuring interstate compact compliance, implementing settlements, protecting river systems, and planning future supply — functions no other entity has legal authority to perform.

Budget Decisions Disregard New Mexico’s Inability to Manage Its Water

The House-approved committee substitute budget already fell far short of what OSE/ISC identified as necessary to address mounting water governance failures, including compact compliance risks, groundwater depletion, and settlement obligations. The agencies requested approximately $132.78 million in special appropriations and program expansions, while the House-passed committee substitute provided about $73.05 million. The Senate Finance Committee authorized seven additional staff but without the $150,000 requested for office space and removed an additional $4.55 million from the House total. The cuts reject the State’s need to carry out essential statutory duties — enforcing water rights, reducing unlawful depletions, implementing the Lower Rio Grande Settlement, replacing the mission-critical water rights database software, and planning for worsening scarcity. The Senate also cut the aquifer mapping program appropriation from the $22.5 million to $10 million.

Committee Chair George Muñoz publicly acknowledged that key budget decisions were shaped through committee members’ rolling discussions outside public hearings and were changed at the last minute. The resulting proposal — including the unexpected removal of a 1% pay increase for teachers and state employees — surprised legislators and highlighted concerns about a back rooms process that also produced major funding decisions affecting the State’s ability to manage its water crisis.

To be frank, it’s our opinion that Sen. Muñoz’s arrogant disregard of New Mexico’s water crises in creating “his” budget is worse than mere fiscal malpractice. Fiscal malpractice means failing to meet State obligations now at the cost of enormous risk and exorbitant future costs. Senator Muñoz is doing more than mismanaging a budget—he is actively undermining the water security of every community in this state.

Evidence of the Senate Finance Committee’s arbitrary decision-making is revealed in the answers to Senator Soules’ (D-Las Cruces) questions of Chairman Muñoz. See the February 16 recording of the Senate Floor debate. The recording can be found here. Senator Soules’ questions begin at 12:26:25. Other Senators also objected to the process and the outcome.

The Outcome For Water

The table linked here provides the Water Advocates’ detailed analysis of the Office of the State Engineer and Interstate Stream Commission’s funding requests and the Legislature’s revisions, comparing the agencies’ original line-item requests with the Executive Budget, the House-approved committee substitute, and subsequent Senate changes.

Without sufficient funding and institutional capacity, OSE and ISC cannot enforce water rights at the scale required, implement interstate and tribal water settlements, reduce depletions, modernize critical data systems, or conduct the long-term planning needed to adapt to declining supplies. These responsibilities cannot be shifted to local governments or private actors; they rest solely with the State.

The funding shortfalls represent a failure to support the institutions responsible for protecting New Mexico’s water future at a time of intensifying drought, climate heating, and chronic overuse of rivers and aquifers. New Mexico cannot manage 21st-century water realities with 20th-century institutional processes, information technology, and thinking.

The funding shortfalls represent a failure to support the institutions responsible for protecting New Mexico’s water future at a time of intensifying drought, climate heating, and chronic overuse of rivers and aquifers. New Mexico cannot manage 21st-century water realities with 20th-century institutional processes, information technology, and thinking.

• The 2026 Legislature has once again failed to strengthen the State’s water management system while there is still time, allowing underfunding to compound risks and invite Texas and the U.S. Supreme Court to determine how New Mexico manages the Middle Rio Grande.
• The Lower Rio Grande settlement imposes onerous requirements, firm deadlines, and new Texas state-line delivery violation penalties promptly payable in actual water deliveries.
• Statewide groundwater overuse — including along the Rio Grande — must be reduced, or New Mexico will suffer permanent and irreversible damage.

Corrections: edited Feb. 19 at 10:40 am to conform to this table included in today’s Interstate Stream Commission staff report that Director Riseley-White presented to the Commission this morning. She said the State Engineer did get seven new positions to administer water in accordance with several Indian Water Rights Settlements and in the Middle Rio Grande to prevent a Rio Grande Compact violation. The ISC Staff Report is online and can be found clicking here and drilling down three layers.

Feb 20, 2026. Added the italicized last sentence of the second paragraph. The Senate Finance Committee also cut that appropriation to less than half the amount approved by the house.