New Mexico judge dismisses a legal challenge to first-in-the-nation universal childcare program

ALBUQUERQUE, N.M. (AP) — A New Mexico judge on Thursday dismissed a lawsuit that challenged the state’s universal childcare program, allowing the ambitious and closely watched experiment to continue.

Attorneys for former Republican gubernatorial candidate Duke Rodriguez and other plaintiffs had questioned 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.

Attorneys representing Lujan Grisham and the state’s childcare agency argued that lawmakers have since authorized and funded the program’s expansion, rendering the legal challenge “moot.”

District Judge Elaine Lujan agreed, tossing the lawsuit and allowing the state to continue footing the daycare bill for families regardless of income. She also found that Rodriguez and his co-plaintiffs lacked standing to bring the lawsuit.

Rodriquez’s attorneys indicated they will appeal the judge’s decision.

Thursday’s ruling prevented a financial headache for many childcare businesses and for families who have rebalanced household budgets around free childcare.

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 came as New Mexico looks to cement its place as the first U.S. state to cover daycare bills for all families regardless of income, provided parents or legal guardians are working, in school or qualify for an exemption. 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.

Jacob Candelaria, an attorney representing the plaintiffs, told the judge that the governor’s move to establish the program without the Legislature weighing in was “a fundamental perversion of the separation of powers” and that New Mexicans’ constitutional interests needed to be protected.

Holly Agajanian, the governor’s chief general counsel, suggested that the plaintiffs were asking the court to referee a policy disagreement on the merits of universal child care.

“We are not in a constitutional crisis,” Agajanian said.

Lujan Grisham signed legislation in February enshrining the program into law, provided state finances remain healthy.

New Mexico’s program, which is financed in large part with 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’s Early Childhood Education and Care Department started overspending just weeks into the November launch.

This week, the state agency proposed new regulations aimed at shoring up the program’s sustainability. Potential guardrails include copayments for higher-income families in the event of a significant drop in oil prices or enrollment in free childcare surging beyond state projections.