Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR De La Cruz
LAST UPDATED
ORIGINAL DATE 2/18/2025
SHORT TITLE Social Services Monetary Stipend Project
BILL
NUMBER House Bill 404
ANALYST Jorgensen
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$3,000.0 Nonrecurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
HED
No fiscal
impact
Indeterminate
but minimal
Indeterminate
but minimal
Indeterminate
but minimal
Recurring General Fund
Total
No fiscal
impact
Indeterminate
but minimal
Indeterminate
but minimal
Indeterminate
but minimal
Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Health Care Authority (HCA) Higher Education Department (HED) Independent Community Colleges (ICC) Workforce Solutions Department (WSD)
SUMMARY
Synopsis of House Bill 404
House Bill 404 (HB404) creates a 3-year pilot program to pay monetary cost-of-living stipends
not to exceed $2 thousand to former foster children or children adjudicated under the
Delinquency Act under the age of 26 who participated in and aged out of the fostering
connections program. The bill requires the Higher Education Department (HED) to administer
the program and determine stipends on an individual basis in consultation with the Health Care
Authority. HED is required to report on program outcomes to the Legislative Health and Human
Services Committee twice a year.
House Bill 404 – Page 2
HB404 appropriates $3 million from the general fund to HED to fund the program through
FY28.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The appropriation of $3 million contained in this bill is a nonrecurring expense to the general
fund. Although this bill does not specify future appropriations, multiyear appropriations,
particularly if used to fund services and those services perform well, create an expectation the
program will continue in future fiscal years; therefore, this cost could become recurring after the
funding period.
The appropriation does not state whether program administration at HED is an allowable cost.
HED reports additional staff, or a third-party contractor will likely be required to fulfill the
provisions of HB404 but did not provide a cost estimate. Therefore, the fiscal implication as
shown in the estimated additional operating budget impact table is indeterminate but minimal.
SIGNIFICANT ISSUES
According to the Annie E. Casey Foundation, only 56 percent of New Mexico foster youth have
a high school diploma or equivalent by age 21. The bill requires a student to be enrolled in a
post-secondary education program, apprenticeship, or workforce development program of WSD,
or another employment support program to be eligible. It is unclear if enrollment in a post-
secondary program would include noncredit workforce training programs offered through higher
education institutions. Additionally, HED offers adult education to help individuals receive a
high school equivalency degree. These individuals would currently be ineligible for
participation.
Assuming participating individuals received the maximum stipend of $24 thousand per year, the
program could support approximately 42 awards each year. To properly evaluate the effect of the
pilot program, HED would need to develop a common set of measures to benchmark and create a
treatment group that receives the intervention and a control group which does not receive the
intervention to compare outcomes requiring HED to make decisions on which individuals to
accept into the pilot program.
HED reports:
To administer this program, NMHED would not only need to evaluate the initial
eligibility of participants, but would also need to monitor continued eligibility for
monthly stipend payments. And the stipend amount is to be individualized for each
participant, depending on other income of the participant, so new data collection and
evaluation procedures would need to be developed.
The final report isn't due until three years after the end of the pilot project, so NMHED
would need to track the participants for up to three years after their participation in the
program to be able to evaluate the long-term benefit to the participants. This would also
require the participants to continue to provide income and other outcome data to
NMHED on a regular basis.
House Bill 404 – Page 3
OTHER SUBSTANT IVE ISSUES
ICC notes: Santa Fe Community College recently piloted a guaranteed income program (a
stipend) through the University of Pennsylvania. The data shows a statistically significant
increase in student completion for those students who received the stipend.
CJ/hj/SR