MLG “free childcare” built on deceit
08.13.2026
During the 2025 legislative session the hot topic for Rio Grande Foundation and the business community was another round of push back against an onerous paid family leave program. We won that battle. For what it’s worth, while these battles were fought in the Legislature, it was unclear what Gov. MLG’s views were and whether she would have signed that bill. As it turned out, MLG had her own plans for a brand new taxpayer-funded entitlement program that (as the courts would eventually decide) didn’t even need legislative approval: universal “free” childcare.
The Gov. outlined her plans for taxpayer-funded universal daycare in New Mexico on September 8, 2025. Acting on her own, the Gov. changed New Mexico’s childcare program from covering families up to 400% of the federal policy level ($132,000 in 2026) to make it “universal.” That program took effect on November 1, 2025. The Democrat-controlled Legislature ratified the program with a few additions and changes during the 2026 session.
But, between November 1, 2025 and the end of New Mexico’s fiscal year (June 30, 2026), the program was found to be running a deficit of approximately $83 million. Since then, two whistleblowers have come forward saying they were retaliated against for calling out these deficits. Carmel Pacheco-Aragon: The Early Childhood Education and Care Department’s chief financial officer filed a suit alleging she was placed on administrative leave after reporting an $83 million shortfall for fiscal year 2026 and warning about improper fund transfers without legislative approval. The Department’s former budget director filed a subsequent lawsuit claiming she was wrongfully terminated for publicly reporting that the department was facing a $258 million shortfall, partially due to the state’s new universal childcare program.
Clearly, MLG’s administration did not want the public to know the program she created was running massive deficits and took retribution on some of the best-placed people that she’d hired to manage the program. Those people can and likely will receive big payoffs (courtesy of New Mexico’s taxpayers) for their troubles. But, New Mexico’s Supreme Court simply ratified the Gov.’s seemingly unconstitutional power grab without so much as a hearing and from a policy perspective that’s all that matters. MLG is getting her way by clearly abusing her power (in multiple ways) and setting a precedent that allows future governors to engage in the same abusive behaviors.
The political and legal incentives to abuse the law in support of an unproven and at best questionable policy is one of MANY reasons why New Mexico is ranked poorly when compared with other states.




