Audit unveils gov’t. out-of-state contract spending
NM auditor says keeping funds local could help boost economy
Government agencies in New Mexico last year sent more than half-a-billion dollars of taxpayer money to out-of-state businesses rather than spending it locally, a practice that is one of the state’s “structural job killers,” state Auditor Tim Keller said Wednesday.
The largest percentage of out-of-state spending happens in the IT, health and medical and food-services industries, Keller told the Economic Forum.
The bright spots are in the construction, architecture and engineering sectors, where 91 percent of the money spent last year through contracts was awarded to in-state vendors. according to intitial data Keller presented. A factor is the instate preference included in construction contracts, he said.
Keller said the information is among initial findings of an audit looking at contracts over $60,000 entered into by state and local governments, school districts and other government entities. The full audit will be released later this year, covering a total of $1.3 billion in contract spending.
Among agencies, Central New Mexico Community College “does the best job of keeping procurement jobs in New Mexico,” Keller said. So where does the out-of-state money go? Mostly Missouri, especially when it comes to the corrections and insurance industries, Keller said. For the health and medical industry, 84 percent of out-of-state spending in 2015 went to Colorado and Tennessee. Keller did not give further details.
Taken altogether, more than half of the contract dollars spent on health care, IT and food services went to vendors outside of New Mexico.
“This represents a huge opportunity — hundreds of millions of dollars of government spending that could potentially nurture expansion in these industry sectors,” according to Auditor’s Office information.
However, Bernalillo County Commissioner Wayne Johnson pointed out that keeping those dollars in New Mexico is not always possible.
He said if a local business offered a product or service that was “wildly expensive,” it would not be a prudent use of taxpayer money to hire that vendor.
He also said the numbers in Keller’s report don’t reflect the fact that even if a purchase were made locally, it’s possible that only a small percentage would stay in the state. That’s because if a computer-related purchase was made locally, for example, it’s often the case that the manufacturer would be from out of state, he said.
Also, he said, some items are simply not available for purchase in New Mexico.