There is an enormous, once-in-a-lifetime amount of federal funding currently available to the state of New Mexico for building climate resilience, conservation projects, creating renewable energy infrastructure, and more. The windfall funding comes from several sources, including the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). It is the kind of genuinely change-making funding that New Mexico cannot afford to pass up. For generations, our state has struggled to access critical federal funding. Whether that is the result of historic disinvestment in the people and communities of New Mexico or because we have not had the resources to match federal dollars, the result has been the same: tens of millions of dollars are left on the table each year.
We took a huge step forward in changing this paradigm when the Legislature passed HB 177 New Mexico Match Fund in the 2024 session. HB 177 appropriates $75 million from the general fund to the New Mexico Department of Finance and Administration (DFA). This allows the DFA to match state funds for federal grants, offset higher project costs to comply with federal requirements, and administer the fund. In a nutshell, this would mean that New Mexico entities will be more competitive with neighboring states that are also vying for IRA and IIJA federal dollars.
One crucial question is, who is eligible for this “local match” or “state match” funding? Here is a list of the eligible entities:
- counties, cities, towns or villages;
- a drainage, conservancy, irrigation, soil and water conservation, water or sanitation district;
- a mutual domestic water consumers association, a public water cooperative association, or a community ditch association;
- a public post-secondary educational institution;
- the state of New Mexico or any of its branches, agencies, departments, boards, instrumentalities or institutions; and
- any other political subdivision of the state; or a federally recognized Indian nation, tribe or pueblo, the boundaries of which are located wholly or partially in New Mexico
Many federal funding programs require matching funds. The match for federal grants is typically 20%, sometimes as much as 50%. The NM Match Fund will be a critical tool to ensure New Mexico’s competitiveness with other states to receive federal funds. $75M was put into this fund as seed funding in 2024, and we will continue to work to invest more money and maintain New Mexico’s ability to compete with other states. There is also no cap on the amount each eligible entity could receive from the fund. The absence of a capped amount allows for a flexible, case-by-case approach to funding.
With this money, our New Mexico communities would be able to invest in a myriad of projects, from investing in climate resilience at the local level to conservation and habitat restoration projects to ensuring that our transition away from fossil fuels is just and equitable. A historical lack of capacity has too often held our communities back. For many of them, the NM Match Fund could be the vital spark funding and momentum they need to make transformative change.
An example of this money in action would be in securing funding for the Energy, Minerals and Natural Resources Department (EMNRD). Every year, it is eligible to receive a monetary award from the Department of Energy called the Grid Resilience State and Tribal Formula Grant. Through it, EMNRD can receive $14 million to strengthen New Mexico’s electric grid. All that is required is a 15% match from the state. For years, EMNRD has had to make special budget requests from the legislature for the match. HB 177 eliminates this burden and uncertainty by guaranteeing New Mexico has the match resources available for modernizing the state’s electric grid.
There are many more examples of projects big and small that have the chance to make enormous impacts on the day-to-day lives of everyday New Mexicans. With these funds, we can invest in critical infrastructure projects and continue building our clean energy economy while working to ensure rural communities are not left behind in our transition away from fossil fuels. The New Mexico Match Fund will deliver key resources today to secure a better tomorrow for everyone.