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 Lanier/Woods
LAST UPDATED
ORIGINAL DATE 3/11/2025
SHORT TITLE Behavioral Health Grant Pgm. & Fund
BILL
NUMBER Senate Bill 432
ANALYST Esquibel/Gray
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$999.1 Recurring Medicaid State Match
$3,536.8 Recurring Medicaid Federal Match
$2,749.1 Recurring
Behavioral Health Grant
Program Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
HCA Medicaid
earmark 2%
Liquor Excise
Tax
$999.1 $1,010.2 $1,020. 2 $1,030.9 Recurring
Medicaid
State Match
Behavioral
Health Grant
Prog 2% Liquor
Excise Tax
$999.1 $1,010.2 $1,020. 2 $1,030.9 Recurring
Behavioral
Health Grant
Program
Fund
Net Impact
Liquor Excise
Tax
($1,998.2) ($2020.4) ( $2,040.4) ($2,061.8) Re curring General Fund
5% Cannabis
Excise Tax
$1,750.0 $1,865. 0 $1,98 5.0 $2,055.0 Recurring
Behavioral
Health Grant
Program
Fund
Cannabis Excise
Tax Impact
($1,750.0) ($1,865. 0) ($1,985.0) ($2,055.0) Recurring General Fund
Parentheses ( ) indicate revenue 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
BHSD $51.6 $51.6 $103.2 Recurring General Fund
DFA LGD $258.5 $258.5 $517. 0 Recurring General Fund
Total $310.1 $310.1 $620.2 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to House Bills 417, 460, and 329 and Senate Bills 1, 2, and 3. Senate Bill 432 – Page 2
Sources of Information
LFC Files
Agency Analysis Received From
Administrative Office of the Courts (AOC) Department of Finance and Administration (DFA)
Department of Health (DOH)
Health Care Authority (HCA)
University of New Mexico Health Sciences Center (UNMHSC)
SUMMARY
Synopsis of Senate Bill 432
Senate Bill 432 (SB432) would establish the behavioral health grant program fund as a
nonreverting fund in the state treasury administered by the Local Government Division (LGD) of
the Department of Finance and Administration (DFA).
The bill amends 7-1-6.4 NMSA 1978 to distribute 2 percent of net liquor excise tax revenue to
the behavioral health grant program fund and amends 7-1-6.68 to distribute 5 percent of net
cannabis excise tax receipts to the behavioral health grant program fund.
SB432 would create the behavioral health grant program within the LGD to make grants to
municipalities and counties for new or existing community-based behavioral health programs. To
qualify for grants, local governments must have adopted behavioral health plans and the
programs or services for which funding is sought must be consistent with the statewide
behavioral health masterplan adopted by the interagency behavioral health purchasing
collaborative. Grantmaking may prioritize services for children.
Finally, SB432 would distribute an additional 2 percent of net liquor excise tax revenue to the
Health Care Authority to increase Medicaid reimbursement for new or existing behavioral health
programs.
The effective date of this bill is July 1, 2025.
FISCAL IMPLICATIONS
The bill requires a distribution of 2 percent of the net receipts attributable to the liquor excise tax
to HCA to increase Medicaid reimbursement for new or existing programs or services for the
prevention, treatment, and screening of behavioral health issues. Two percent of liquor excise tax
is $999.1 thousand annually, which would generate a federal Medicaid match of $3.5 million, for
a total of $4.5 million.
The bill would direct 2 percent of liquor excise tax and 5 percent of cannabis excise tax to the
proposed behavioral health grant program fund. The net total of these two revenue sources for
FY26 is $2,749.1, from which LGD would award grants to municipalities and counties for new
or existing community-based programs or services to address behavioral health issues. Senate Bill 432 – Page 3
The Local Government Division of DFA estimates it would require 2 FTE at a cost of $258.5
thousand to implement the bill.
The Behavioral Health Services Division (BHSD) of HCA estimates it would require two half-
time positions at a cost of $51.6 thousand to implement the bill.
Although the bill does not specify future appropriations, establishing a new grant program could
create an expectation the program will continue in future fiscal years; therefore, this cost is
assumed to be recurring.
This bill would create a new fund and in effect provides for continuing appropriations for
Medicaid and the behavioral health grant program. LFC has concerns with including continuing
appropriation language in the statutory provisions for newly created funds because it reduces the
ability of the Legislature to establish spending priorities.
The bill diverts or “earmarks” revenue, representing a recurring loss from the general fund. LFC
has concerns with including continuing distribution language in the statutory provisions for funds
because earmarking reduces the ability of the Legislature to establish spending priorities.
SIGNIFICANT ISSUES
The Department of Health’s Indicator-Based Information System indicates New Mexico has 86.6
alcohol-related deaths per 100 thousand population, and 2,274 New Mexicans died as a result of
alcohol use in 2021.
According to a 2023 LFC progress report, alcohol is New Mexico’s predominant substance-use
problem. The state has had the highest alcohol-related death rate in the country for over a decade,
and the state’s alcohol related death rate grew by 32.4 percent between 2019 and 2021.
According to a 2023 LFC progress report, McKinley, Cibola, Rio Arriba, San Juan, and Socorro
counties are hotspots of alcohol-related deaths. McKinley, Cibola, Rio Arriba, San Juan, and
Socorro counties had the highest alcohol-related death rates in 2021, the most recent year for
which the Department of Health has reported county-level data. These five counties all had death
rates that exceed 150 per 100 thousand people. Meanwhile, deaths in Bernalillo, McKinley, San
Juan, Santa Fe, and Sandoval counties made-up 62 percent of all 2021 alcohol-related deaths in
the state in 2021.
ADMINISTRATIVE IMPLICATIONS
HCA notes BHSD would need to collaborate with DFA’s Local Government Division around
guidelines when selecting grant recipients with consideration of geographic location, per capita
deaths or accidents related to behavioral health issues, needs-based assessments, population, and
availability of existing services. Medicaid would require federal approval of rate changes
through a State Plan Amendment. Medicaid rate changes can only be made with sustainability of
ongoing state and federal funding.
Senate Bill 432 – Page 4
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Senate Bill 432 relates to Senate Bills 1, 2 and 3 which would create the Behavioral Health
Reform and Investment Act, created a behavioral health trust fund, and appropriate general fund
revenue for health and safety initiatives; Senate Bill 378, House Bill 417, and House Bill 460,
concerning liquor taxes; and House Bill 329, which would create the behavioral health
purchasing collaborative.
OTHER SUBSTANT IVE ISSUES
The University of New Mexico Health Sciences Center reports the bill proposes to dedicate a
proportion of the net receipts of the cannabis excise tax for behavioral health treatment. Recent
research associated legalization of cannabis in Canada with a nearly three-fold increase in the
share of schizophrenia diagnoses attributable to cannabis use. This risk of increased psychosis
suggests that there may be more need for behavioral health treatment as access to cannabis
increases.
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