New Mexico’s Child-Care Breakthrough Shows the Power of a Strong Oil Economy

New Mexico has become the first state in the nation to offer free, universal childcare to all families, regardless of income. This is a sweeping expansion of a program the state launched in 2022. The policy now covers children as young as six weeks old and is expected to save families an average of $16,000 per year in full-time care costs. What makes New Mexico’s initiative especially notable is its funding source: a multibillion-dollar trust built from oil and gas revenues.

The fund has grown substantially during the fracking boom, giving the state a stable financial base to pay the projected $445 million cost this fiscal year and $600 million next year. By relying on interest from the fund, New Mexico believes the program can endure even during commodity downturns.

The lesson from New Mexico is that significant social investments need a robust, stable economic engine to support them.

New Mexico’s universal childcare system exists because oil and gas revenues made it possible. This is an important reminder for California, where the oil and gas industry remains one of the state’s most significant economic pillars,

As New Mexico demonstrates, a strong energy sector can be the backbone that makes large-scale social programs, like universal childcare, financially possible.