Last in education, first in excuses: NM loses millions after failing to spend funds

The Trump administration has taken a bold step to ensure accountability and fiscal responsibility in the handling of pandemic-era education relief funds—ending a previously granted extension for New Mexico to spend the remaining $12.3 million in federal ESSER (Elementary and Secondary School Emergency Relief) funds. In a March 28 letter, Linda McMahon of the U.S. Department of Education notified state education leaders that the liquidation period for these funds was being cut off effective immediately.

The decision came as a wake-up call to New Mexico’s education bureaucracy, which had failed to efficiently utilize its allotted federal aid. Despite being granted nearly $980 million in total relief through ESSER during the pandemic, New Mexico still had millions left unspent, with state officials citing supply chain issues and inadequate staffing. But McMahon’s letter made it clear: “By failing to meet the clear deadline in the regulation, you ran the risk that the [U.S. Department of Education] would deny your extension request.”

In other words, New Mexico had ample time to deploy these resources—yet, as with many government initiatives in the state, the follow-through was lacking.

Lieutenant Governor Howie Morales, a Democrat and former educator, reacted angrily, calling the decision a “reckless and abrupt termination” that would impact students across the state. He claimed it would disrupt after-school programs, HVAC upgrades, and even outdoor classroom projects—yet failed to address why these projects weren’t completed in the years prior.

Attorney General Raúl Torrez joined the chorus of complaints, calling the decision “unacceptable and reckless,” and announced that New Mexico was joining over a dozen other Democrat-run states in suing the Trump administration. The lawsuit alleges that the reversal would strip schools of “essential resources like food, classroom supplies, [and] special education for teachers.”

But what’s truly “unacceptable,” critics argue, is that Democrat Gov. Michelle Lujan Grisham’s New Mexico’s Public Education Department—despite being granted an extension through March 2026—still hadn’t managed to allocate the full amount efficiently. This is in a state that ranks dead last in education outcomes nationally, falling behind every other state and even the District of Columbia. According to longstanding rankings, New Mexico continues to struggle with low test scores, high dropout rates, and chronic absenteeism.

While the state now scrambles for another extension, the Department of Education has signaled that the era of open-ended pandemic spending is over. McMahon made it clear in her letter that “extending deadlines for COVID-related grants, which are in fact taxpayer funds, years after the COVID pandemic ended is not consistent with the Department’s priorities.”

The state had intended to funnel the remaining millions toward tutoring, after-school activities, and infrastructure upgrades in school districts, including Bloomfield, Deming, and Moriarty-Edgewood. However, the funds sat largely untouched despite the pressing academic needs brought on by the pandemic—another example, critics say, of bureaucratic mismanagement in a chronically underperforming education system.

Public Education Department spokesperson Janelle Taylor García confirmed the agency plans to apply for yet another extension. But with the Department of Education signaling that prior approvals are not guaranteed and “may be reconsidered,” the clock may have finally run out.

Despite the blow, Morales insists, “I’m not going to give up. I will continue to fight for our students and our educators who need these after-school, summer learning and tutoring programs.” Still, observers note that a true fight for students might start with taking responsibility for why the state fell behind in deploying resources in the first place—especially when the Trump administration is demanding that taxpayer dollars be used wisely and efficiently.