The recent federal government shutdown has underscored New Mexico's significant reliance on federal funding. Virtual Capitalist data shows that New Mexico ranks as the most dependent state in the United States when it comes to receiving federal dollars.
Several factors contribute to this dependency. The state is home to three major Air Force bases, the White Sands testing range, and two national nuclear laboratories—Los Alamos and Sandia. Additionally, 41 percent of New Mexico's land is managed by the federal government, including a substantial portion designated as tribal lands.
This level of reliance extends beyond land and military operations. Many residents depend on federal welfare programs such as the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. "New Mexico is far and away the most reliant state on SNAP (food stamps) at 21.2% of the population. No other state has as much as 20% of its population on SNAP while neighboring Utah has just 4.8%. Colorado and Texas have less than half as many people by percentage on food stamps," wrote Paul Gessing, president of the Rio Grande Foundation.
Medicaid in New Mexico is funded with a three-to-one match from the federal government. Although Medicaid was not affected by the shutdown due to its entitlement status, Gessing noted it still presents a significant challenge for the state.
Gessing argued that even if future shutdowns are avoided and national debt issues are resolved, reducing dependence on these programs would benefit New Mexicans: "The fact that so many New Mexicans are reliant on these programs points to a failure of the State’s economic policies."
Despite an ongoing oil and gas boom providing increased revenue—lawmakers expect $500 million in new funds for 2026—the issue persists. The state also holds $66 billion invested in sovereign wealth funds.
Governor Michelle Lujan Grisham recently called two special legislative sessions aimed at shifting costs for healthcare subsidies and SNAP payments to state funding if federal support wanes. However, Gessing criticized this approach: "She’s been in office during seven legislative sessions, all of which saw big oil-and-gas-driven budget surpluses. Over that time span she has done nearly nothing to improve New Mexico’s economy and reduce New Mexico’s over-dependency on federal welfare programs."
He acknowledged that welfare programs serve an important purpose but maintained that “New Mexico is not a poor state. Its people shouldn’t be poor, either.”
Gessing referenced news stories about long-term use of SNAP benefits—including a woman who has received them for 30 years—and highlighted instances where SNAP funds were misused or traded for drugs like fentanyl.
"While these cases of fraud are problematic and sadly divert resources away from those who need the help, the best solution is to encourage New Mexicans to become productive citizens and to leave dependency behind," he stated.
Paul Gessing leads the Rio Grande Foundation, an independent research organization based in New Mexico.
