Lawmakers eye $1.4B in unspent capital outlay funds
Every year, state lawmakers in New Mexico dole out millions of dollars in capital outlay appropriations for a vast array of projects that tend to be in their districts — from the purchase of a new firetruck to the renovation of an old courthouse.
The so-called pork barrel spending is highly sought after, but once approved, the funding often sits idle, for reasons that range from insufficient funds to complete projects to not enough employees to manage them.
Over the past five years, more than 75 percent of the $1.9 billion the state authorized for 2,644 projects — or about $1.4 billion — has gone unspent, prompting lawmakers to consider a use-it-or-lose-it approach that could free up the money for other purposes.
“We’re trying to find productive uses of monies that are stranded, in effect, by inaction,” David Abbey, director of the Legislative Finance Committee, said Wednesday.
During a presentation before the committee last week, Rep. Patty Lundstrom, D-Gallup, asked Abbey and his staff to work on legislation for the 2021 session to allow for a
reallocation of unspent funds.
“I’d much rather see it sitting in the reserve than sitting in some kind of a fund that’s not going to be spent,” Lundstrom, vice chairwoman of the committee, said during the meeting.
“We know that there’s got to be at least a year to get things stood up and ready, but come on now,” she added. “I mean, some of these things have been reauthorized more than once, obviously, that weren’t ready to go.”
Funding appropriations that have been static for years include $2 million for a library at the Southwestern Indian Polytechnic Institute in Albuquerque, which is developing a new statement of work to separate the design and construction aspects of the project, and $1 million for an Oil Conservation Division office in Artesia that needs additional funds to proceed.
Rep. Javier Martínez, D-Albuquerque, said he envisions a similar approach lawmakers took during the special session in June when they examined mostly local government projects “that had not moved for a couple of years.”
“We were essentially going to sweep them,” he said. “The agreement we came to, instead of sweeping them automatically, was to give local governments [a deadline] to encumber a certain percentage.”
The move prompted entities to take action, he said.
“One of the things that I noticed was that once we put that out there, I think it really forced, particularly local governments, to move on some of these funds,” he said. “They started really moving the process along.”
In an interview Tuesday, Lundstrom called the unspent funds a “stimulus” that she would like to unleash in New Mexico, which has been hit with declining revenues amid the economic fallout from the coronavirus pandemic.
“Forty-seven percent of [the total unexpended balance of $1.4 billion] is general fund; we want to make sure that money gets out and is working,” Lundstrom said. “I imagine because of all this COVID stuff, some of that has slowed it down, but we still have some projects that are super old that need to be spent or come back into our reserves.”
During last week’s presentation, Linda Kehoe, a retired Legislative Finance
Committee employee who now serves as a consultant to the committee, said a majority of the unspent capital outlay funds were appropriated in the past two years.
“Both local and state entities have significant backlogs and responsibilities for overseeing the movement of capital projects,” she said. “For example, the Aging and LongTerm Services Department, with only three [full-time employees], oversees 290 active projects with an outstanding balance of $55 million. The General Services Department in the last few months, due to the pandemic, had to extend terms of contractual obligations for 16 projects totaling $32 million.”
Kehoe encouraged lawmakers to review localized capital improvement plans for projects that have been “vetted and prioritized” to make sure projects are ready to go.
“Appropriations for planned projects will prevent the proliferation of unexpended funds,” she said.
Kehoe also urged lawmakers to pull the plug on stagnant projects.
“The staff is encouraging members to review the unexpended funds and projects within your districts that are not progressing and perhaps consider moving — in other words, reauthorizing the funds — to projects that will result in a fully functional phase or that will complete a project,” she said.