Restaurants statewide will soon front higher costs for late permit renewals, inspection do-overs and some types of applications under upcoming changes to the New Mexico Administrative Code.
The changes — proposed and described by the New Mexico Environment Department as necessary to address increasing costs — will go into effect Oct. 1. They follow longtime funding woes at the department’s Environmental Health Bureau, which oversees the inspections of most of the state’s food service establishments.
The Environment Department announced in April it would stop performing routine inspections of thousands of restaurants, pools and septic systems due to a funding gap. At the time, the department and Gov. Michelle Lujan Grisham said they had requested $1.2 million from the Legislature earlier in the year to maintain both staff salaries and the inspection program — and had received none of that money.
Lujan Grisham ordered the department to resume inspections a few days later. The state Department of Health provided $200,000 to the Environment Department so it could continue inspections through the end of fiscal year 2026, which comes June 30, according to Environment Department spokesperson Drew Goretzka.
“This short-term fix temporarily improved our budget but does not provide a long-term fix,” Goretzka wrote in an email to The New Mexican. “Today, we are currently 30 inspectors short of what is needed to implement the food safety program required by law and rule.”
The inspection program ideally needs about $13 million to stay afloat, Environmental Health Division Director William Schaedla told The New Mexican in April. The Environmental Health Bureau, overseen by the division, has 35 dedicated inspectors, each of whom performs roughly 500 inspections per year.
The Administrative Code amendments were signed June 8 and published in the the New Mexico Register on June 23, two months after a public hearing before the Environmental Improvement Board. The hearing took place the same day The New Mexican reported the Environment Department would pause its inspections.
“The current fees have remained unchanged for over 20 years and no longer reflect the actual cost associated with providing these services,” Environmental Health Bureau Chief Marci Nevarez said at the hearing. “ … With a limited funding portfolio and inherent statutory limitations, the department’s unable to fund program operations.”
The board’s deliberation was moved to its May 27 meeting, where members moved the amendments forward.
The Environment Department held other public hearings across the state between August and October after formally proposing the changes in May 2025.
‘Their regulations are killing us’
The fee changes for food service establishments include:
- Creating a plan review application fee ranging from $300 to $900 for food service establishments and $400 to $1,400 for food processing plants, depending on their size.
- Creating a variance application fee — for restaurants asking to be exempt from food regulations — of $400.
- Increasing the late permit renewal fee from $25 to $175.
- Increasing the reinspection fee from $100 to $500.
An owner must pay the plan review application fee before the construction, conversion or remodeling of a food service establishment. The high-end fees are for establishments 2,001 square feet or larger.
Carol Wight, the outgoing CEO of the New Mexico Restaurant Association, described the fee hikes as “punishing.”
“It’s almost as though the state doesn’t want people to build restaurants,” she said. “And we keep telling them that their regulations are killing us, and they keep regulating.”
There are very few restaurants in the state smaller than 2,000 square feet, she added.
Other changes to the code include adding a definition for “caterer”; subjecting those who violate the code to administrative compliance costs; noting no discounts or refunds are allowed for any fees an establishment pays; and deleting a section of regulations for home-based food processors, which are covered by the state’s Home Made Food Act of 2021.
“Since the major revision of the rules in 2016, and minor updating in 2018, the cost of conducting inspections, reviewing plans, and performing reinspections after violations have been observed has increased greatly, straining the Bureau’s budget,” the Environment Department wrote in its June 2025 petition for regulatory changes. “In addition, the Department has identified several relatively minor changes to improve the clarity and enforceability of the regulations.”
‘They can really hit you hard’
The impact of the heightened reinspection fees is particularly worrying, Wight said.
All food service establishments — including schools, hospitals, detention centers and nursing homes — undergo inspections that catch and correct violations of the New Mexico Food Code, such as rodent infestations and improper food handling practices. Bernalillo County and the city of Albuquerque have their own food safety programs — and their own regulations — though the Environment Department still inspects public facilities there.
Food service inspections take place annually, with the renewal of an establishment’s permit; prior to the opening of a new establishment; when an establishment closes; and when people call the Environment Department with a complaint. When inspectors find significant violations during a routine inspection, they can schedule a reinspection — typically within a few weeks — to check whether the establishment has rectified the issues.
“They know this reinspection fee is the one where they can really hit you hard, because you’re desperate for that reinspection,” Wight said.
In previous years, the Environment Department has unsuccessfully asked the Legislature to increase some fees related to the permitting process. After three failed attempts, the department “reviewed the law and determined that some lesser fee structures could be set by rule,” Goretzka wrote.
“This will help stabilize the food safety program until a permanent solution is reached,” he added.
The New Mexico Restaurant Association sent a letter to lawmakers during the 2026 regular legislative session asserting its support for additional funding for the food safety program “so that it doesn’t have to come out of the pockets of small businesses,” Wight said.
When the Environment Department didn’t get the money, officials said they planned to go back to the fee-increase drawing board.
“Right after the legislative session, the Environment Department told us that they were going to go again to try to make these changes in order for them to continue with a decent budget,” Wight said.
‘A fraction of what it takes’
The Environment Department received about a 9% increase overall in recurring funding for fiscal year 2027, which begins July 1, state Rep. Nathan Small, D-Las Cruces, told The New Mexican in April.
But long-term funding shortfalls remain for the Environmental Health Bureau.
The fee changes won’t fill those gaps, Goretzka wrote. They will instead deter late permit renewals, which cost the state more resources.
“For example, over 1,303 permitted food establishments let their permits lapse in the last eighteen months,” he wrote. “The Department spends significantly more in personnel and overhead costs chasing the $25 renewal fee.”
Ahead of Oct. 1, he added, the department has been losing:
- $252 on each initial inspection.
- $401 on each reinspection.
- Between $824 and $1,380 on each plan review.
- $395 on each variance application.
“The fee increases offset a part of these losses, but all these services continue to cost us more in inspection staff and administrative time,” Goretzka wrote. “The new fee schedule will offset only a fraction of what it takes to keep a state-wide public health services program operating.”
