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Tuesday, September 1, 2026

New Mexico state agency CFO files lawsuit alleging $83M budget shortfall from universal childcare - sourcenm.com

The New Mexico Early Childhood Education and Care Department’s chief financial officer is suing the department and alleging that its leaders retaliated against her for raising concerns that the implementation of the universal childcare program late last year caused an $83 million budget shortfall.

Carmel Pacheco-Aragon filed the whistleblower protection lawsuit in the state’s First Judicial District Court late Wednesday evening. In the lawsuit, she alleges that ECECD leaders illegally shuffled funding between programs to cover the shortfall.

The lawsuit says she told ECECD Secretary Elizabeth Groginsky that state law requires written authorization and legislative approval for such budgetary adjustments — and alleges that ECECD leaders had only secured verbal authorization from the state Department of Finance and Administration.

“The law doesn’t take this position of, ‘Do whatever the hell you want. We’ll figure it out next session.’ That’s not how the appropriation statutes work,” Jacob Candelaria, an attorney and former state lawmaker who’s representing Pacheco-Aragon, told Source NM Thursday. “That’s what’s happening, from what we can tell.”

Candelaria previously represented a trio of Republicans who unsuccessfully challenged the legality of the state’s universal childcare program. After a Second District Court judge denied their claim in June, Candelaria appealed to the New Mexico Supreme Court, where he similarly lost.

Gov. Michelle Lujan Grisham first announced the...



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