Judge considers arguments in challenge to New Mexico's universal childcare program

ALBUQUERQUE, N.M. (AP) — A New Mexico judge is scheduled Thursday to consider arguments in a challenge to the state's fledgling universal childcare program, an ambitious and closely watched effort to eliminate daycare costs for all working families.

A lawsuit brought by former Republican gubernatorial candidate Duke Rodriguez and other plaintiffs challenges the process used by Democratic Gov. Michelle Lujan Grisham's administration to eliminate an income cap and co-pays for childcare assistance before the Legislature had a chance to weigh in or approve funding.

“This is executive overreach. The program was launched unlawfully,” said Rodriguez, who lost his party’s nomination in New Mexico’s recent primary.

The state’s childcare agency disputes that, arguing in court filings that lawmakers have since “expressly authorized” and funded the expansion, rendering the lawsuit moot. Lujan Grisham signed legislation in February enshrining the program into law provided state finances remain healthy.

District Judge Elaine Lujan could issue a ruling Thursday on whether the lawsuit can proceed. A potential pause to the program would put thousands of New Mexican families back on the hook for daycare payments and create a headache for businesses.

Ilene Harding, who runs seven daycare centers in the Albuquerque area, said the expansion has boosted enrollment and streamlined billing.

“We’ve always been financially solvent, but it’s given us stability,” Harding said.

The challenge comes as New Mexico looks to cement its place as the first U.S. state to cover all working families’ daycare bills regardless of income. But the stakes extend nationwide as policymakers from New York to California look for models to reduce costs for families and expand public investment in childcare.

New Mexico’s program, which is financed in large part on revenue from oil and gas production in the state, was among the nation's most generous before November’s expansion, waiving costs for families making up to 400% of the federal poverty rate or roughly $132,000 per year for a family of four.

Legislative analysts already have raised questions about the sustainability of New Mexico's expanded program, noting earlier this year that the state Early Childhood Education and Care Department started overspending just weeks into the November launch.

The state agency acknowledged at the time that enrollment grew faster than expected, leading to higher costs, but disputed that it was over budget.