New Mexico slashes poverty despite soaring inflation

You might not know it from scanning the headlines, but New Mexico has reduced poverty at triple the national rate while bucking a national affordability crisis and federal program cuts that make life more difficult for working families.

New U.S. Census Bureau data reflects the Lujan Grisham administration’s success in moving New Mexicans out of poverty despite fierce economic headwinds, including soaring gas prices and inflation, housing shortages, and cuts to Medicaid and nutrition benefits for low-income families.

In the Census Bureau’s most recent three-year Official Poverty Measure, which reflects pre-tax income levels, the number of New Mexicans living in poverty fell by 1.2 percentage points – triple the national reduction of 0.4 percentage points. New Mexico is among the top five states in the nation in poverty reduction.

How has New Mexico achieved this? For one, the Land of Enchantment leads the nation in family income growth. What’s more, New Mexico ranks 7th in the nation for job growth, adding 11,200 jobs in the past year. A relentless focus on fostering a competitive business environment is attracting cutting-edge, internationally recognized companies while creating jobs, raising incomes, and spurring economic growth.

Dig a little deeper, and you’ll find more. The Supplemental Poverty Measure considers more initiatives championed by Governor Lujan Grisham and the Legislature to alleviate poverty, including refundable tax credits targeted to low- and middle-income families, education and child assistance benefits, and action to offset federal attacks on health care.

Under the new three-year SPM study, New Mexico’s poverty rate hovered at 13.2%, nearly on par with the 13.0% national average, and a big leap forward from ranking among the worst in the nation before Governor Lujan Grisham took office.

New Mexico is trending dramatically in the right direction when other states are barely moving the needle. Our attack on poverty is clearly benefiting children the most. While the OPM shows 20.9% of New Mexico children in poverty, that number drops to 10.9% under the SPM, significantly less than the national average of 13.5%.

New Mexico’s Child Tax Credit is a key factor in reducing child poverty. First implemented in 2023, the Child Tax Credit delivered $138 million in tax relief to 255,000 families this year alone. When other tax credits, investments in housing affordability, and state-supported food nutrition assistance programs are included in the SPM calculation, New Mexico’s children have the best chance to emerge from poverty in decades.

Even more promising is that the three-year SPM does not yet reflect New Mexico’s investment in universal childcare. Child poverty in our state will almost certainly drop even more once SPM data reflects the governor’s first-in-the nation initiative that puts an average of $13,000 per child back in the pockets of working families and allows parents the opportunity to pursue careers that were once out of reach.

With inflation spiking to 3.7% in September and gas prices averaging well over $4 because of President Trump's war with Iran, it’s more important than ever that New Mexico policymakers invest state resources to achieve affordability and deliver meaningful, targeted tax relief.

While we should all celebrate such a meaningful reduction in child poverty, this is no time to let off the gas. New Mexico must keep investing in tax policy and programs that help those who need it most while creating durable jobs that grow our economy.

That’s how we can achieve the goal of lifting every New Mexican out of poverty once and for all.

Stephanie Schardin Clarke was appointed by Governor Michelle Lujan Grisham to serve as the Cabinet Secretary of Taxation and Revenue in January 2019. She has over 22 years’ experience in State and local government in New Mexico and has a master's in economics.