SANTA FE — On Thursday afternoon, the New Mexico Senate passed a significant spending bill, allocating $1.2 billion in one-time funding for local infrastructure, buildings, and equipment. The bill, known as "capital outlay," is aimed at supporting over 1,400 projects across all 33 counties in New Mexico. The measure passed with a 25-16 vote, with opposition from Republican lawmakers.

Purpose of the Capital Outlay Bill

Each year, lawmakers approve a capital outlay bill to fund infrastructure and construction projects such as new buildings, road improvements, park developments, and upgrades to acequias (irrigation canals). This year’s funding will support a wide range of local and regional projects aimed at improving the state's infrastructure.

While the bill passed smoothly in the Senate after a committee review, the process was not without controversy. Sen. Pat Woods (R-Broadview) expressed his concerns about an unexpected addition to the bill: a $10 million request from Gov. Michelle Lujan Grisham for the construction of a reproductive health clinic in Northern New Mexico. Woods commented, “I know the governor has all the rights in the world to put in whatever piece she wants in this… I’m disappointed it came in so late and that I wasn’t able to see it ahead of time.”

Big-Ticket Items in the Bill

Some of the high-profile projects included in this year's capital outlay bill include:

• $50 million for public school building improvements across the state.
• $40 million for the construction of a new forensic unit at the Behavioral Health Institute in Las Vegas, New Mexico.
• $40 million to develop a humanities and social sciences complex at the University of New Mexico in Albuquerque.

The majority of the funding, nearly $800 million, will come from the state’s General Fund, the largest pool of public money in New Mexico. Additionally, $292 million will come from severance tax bonds, and the remaining $132.9 million will come from other state funds.

Reforms to the Capital Outlay Process

Though the bill has passed, lawmakers are already considering reforms to improve the capital outlay process. The Legislative Finance Committee (LFC) has recommended changes such as setting earlier deadlines for capital outlay requests, developing more robust methods for vetting and tracking projects, and possibly setting a minimum funding “floor” for projects.

Rep. Derrick Lente (D-Sandia Pueblo) pointed out that the process is still evolving: “Capital outlay is a work in progress,” he said. Lente emphasized the need for modernization of the process, noting that without a minimum funding threshold, projects might be underfunded, causing costs to rise over time and ultimately leaving projects incomplete.

In total, $5.8 billion remains unspent in capital outlay funding, a reflection of inefficiencies within the current system. According to Cally Carswell, principal capital outlay analyst for the Legislative Finance Committee, "We have $5.8 billion in unspent capital outlay funding, and this is an issue that needs immediate attention."

Coordination of Funding and Technological Solutions

There are ongoing efforts to better coordinate capital outlay funding across the state. Sen. Michael Padilla (D-Albuquerque) urged lawmakers to work together to ensure funding is distributed more effectively. Carswell suggested that more coordination could be facilitated through “technological solutions or additional tools” after the legislative session ends, helping lawmakers align their funding efforts.

Issues with Active Projects

The state currently has 712 active capital outlay projects, accounting for $4.3 billion in total, according to data from legislative staff. However, progress on these projects has been uneven:

• 360 projects are on schedule.
• 75 projects are behind schedule.
• 277 projects have seen no activity, due to issues such as local governments failing to sell bonds or encountering other significant obstacles to completion.

Sen. George Muñoz (D-Gallup), Chair of the Senate Finance Committee, expressed frustration with the current state of capital outlay funding: “We’re spending the money the wrong way. We’re wasting money,” Muñoz said, citing concerns that many projects lack proper planning and fail to stay on budget or schedule. “People show up with a project and an idea, and they have no plan. They don’t know what the cost is. They just know we’re giving away free money.”

A Call for Change

As the session progresses, lawmakers and experts agree that reforms to the capital outlay process are necessary to ensure better oversight, coordination, and completion of critical infrastructure projects. Moving forward, the Legislative Finance Committee may start looking into technological solutions to improve transparency and project tracking, which could lead to a more efficient use of public funds.

Looking Ahead: Continuing Efforts to Modernize Capital Outlay

Lawmakers are continuing to explore ways to modernize the capital outlay process in New Mexico, including refining the vetting procedures, setting funding floors for projects, and ensuring better coordination across the state. These changes, alongside increased oversight and technological support, are seen as crucial steps in making sure that the state’s infrastructure needs are met efficiently and effectively.

Stay tuned for future updates as the New Mexico Legislature works toward refining its approach to capital outlay funding and addressing the challenges facing active infrastructure projects throughout the state.

Originally reported by Austin Fisher in Source NM.