NEWS
Second whistleblower lawsuit filed against NM childcare agency alleging multimillion dollar financial hole
Former budget director sues, claiming retaliation for exposing $258 million shortfall
A second former official is suing the New Mexico Early Childhood Education and Care Department, claiming retaliation for exposing an alleged multimillion dollar budget shortfall caused in part by universal childcare.
Kimberly Gonzales claims in her suit, filed Tuesday in New Mexico鈥檚 1st Judicial District, that she was fired from her job as the ECECD鈥檚 former budget director after disclosing a $258 million hole in the department鈥檚 budget for fiscal year 2027.
To become financially whole for FY2027, the complaint alleges the department needs $155 million in revenue from the State Investment Council's early childhood trust fund that was not transferred to the ECECD as initially promised, an additional $83 million to fund universal childcare payments and $20 million for various other programs.
In September, New Mexico became the first state in the nation to offer free childcare to all residents. The program was announced Sept. 8, and is expected to cost the state $606 million in fiscal year 2027, according to a state news release.
Gonzales claims in her suit she raised the issues to department officials including ECECD Secretary Elizabeth Groginsky and to the Department of Finance and Administration and recommended various spending restrictions and controls.
Gonzales, who was hired in late October 2025, was notified she was under internal investigation on June 30 for what the suit alleges was an undisclosed reason. On July 13, she was placed on administrative leave 鈥 20 minutes before her scheduled interview on the investigation, the complaint alleges 鈥 and was fired on July 21 for 鈥渋nappropriate behavior and unprofessional conduct.鈥
Gonzales is seeking reinstatement, double back pay plus interest, damages and attorney fees.
Gonzales is being represented by attorney Jacob Candelaria, a former New Mexico state senator, who served in the Legislature from 2013 to 2022, first as a Democrat and later as an independent.
Candelaria is also representing the ECECD鈥檚 former chief financial officer, Carmel Pacheco-Aragon, in her whistleblower lawsuit against the department, filed last week. In it, Pacheco-Aragon alleges she was placed on administrative leave from her job after exposing an $83 million budget shortfall created by the universal childcare program.
Candelaria is the same attorney who represented Republican gubernatorial hopeful Duke Rodriguez and two other plaintiffs when they sued the state earlier this year, claiming the rules underpinning the universal childcare program were unlawful. The suit was dismissed in June.
鈥淭he push for universal childcare, candidly, is a recent invention of this administration, because (Gov.) Michelle Lujan Grisham wants to prove that she鈥檚 relevant in an increasingly socialist Democratic Party,鈥 Candelaria said.
Candelaria contended that both Groginsky and Finance and Administration Secretary Wayne Propst should be investigated for approving childcare payments knowing the state did not have enough funds to cover them.
鈥淚 hope that the (attorney general) will set aside partisan loyalty and how popular this idea of (universal) childcare has become and look at the evidence,鈥 Candelaria said.
In a statement Tuesday, Deputy ECECD Secretary Kendal Chavez said the allegations in the complaint were false.
鈥淭his complaint is another manufactured and unfounded allegation by Jacob Candelaria who has shown dedication to taking down universal childcare and taking vital benefits from New Mexico鈥檚 families and children at all costs,鈥 Chavez said.
鈥淓CECD has never and will never take retaliatory action against employees for coming forward with information, questions or concerns about the operations of our department. We cannot comment on the specifics of this litigation, but we will bring the facts to court, and we are confident we will prevail once again.鈥
Candelaria said the agency invoking his name was an attempt to divert attention from the facts of the case.
鈥淭hey can say whatever they want about me,鈥 he said. 鈥淚鈥檝e been called worse by a lot better.鈥
Natalie Robbins covers education for the Journal. You can reach her at nrobbins@abqjournal.com.