Legislation sponsored by Sen. George Muñoz (D-Gallup) cleared the New Mexico Senate on Jan. 28, 2026. The bill is aimed at recouping money from Gallup-McKinley County Schools after the Public Education Department reported a $35 million shortfall. (Danielle Prokop/Source NM)

The New Mexico Senate voted 36-1 on Wednesday to pass a bill with an emergency clause that could start the process of recouping millions of dollars from Gallup-McKinley County Schools.

Lawmakers have been focused on the district’s finances since December, when New Mexico Public Education Department Secretary Mariana Padilla informed them of a $35 million shortfall in her agency’s budget.

That shortfall traces to May 2025, when Gallup-McKinley canceled its contract with a virtual learning provider and accused it of breaching its contract with the district. As a result, about 3,000 students enrolled in the online learning program had nowhere to go. Two other districts in New Mexico stepped up and adopted about 1,500 students apiece into their virtual classrooms.

However, since school districts receive funding based on the prior year’s enrollment numbers, Gallup-McKinley continued to draw money for virtual students it no longer had, Padilla said at the December Legislative Finance Committee hearing.

Deputy Superintendent Jvanna Hanks previously disputed that characterization to Source NM.

Sen. George Muñoz (D-Gallup) on Wednesday said that Senate Bill 19, which he co-sponsored, would give state education officials the time they need to figure out how much money was overpaid to Gallup-McKinley and how they can get it back. It passed the Senate on a 36-1 vote and carries an emergency clause, meaning it will go into effect immediately if Gov. Michelle Lujan Grisham signs it into law.

“This was caused by one school district…I was so pissed off,” Muñoz said from the Senate floor. “They should have returned the money.” Currently, he added, there’s no law on the books that would let the state recoup the money.

The district did not immediately respond to a request for comment.

The bill orders PED to consult with the state Department of Finance and Administration, the Legislative Finance Committee and the Legislative Education Study Committee to revisit allocations made under the current fiscal year’s budget. It would provide PED and the Legislature more time “to consider potential statutory changes to address” this issue during the 2026 session, according to an LESC analysis of the bill.

Several senators who supported the bill said that virtual learning is increasingly a necessity in a state as sprawling and rural as New Mexico but, as Sen. Michael Padilla (D-Albuquerque) said, “We have to do it the right way.”

Sen. Bill Soules (D-Las Cruces) did not hold back in his praise for the legislation.

“This will be one of the defining bills of the session,” he said.

NM Senate passes emergency bill aimed at recouping money from Gallup schools

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