State analysts urge New Mexico lawmakers to prioritize capital outlay

Dec. 10—On the heels of a November report that made note of an unspent capital outlay balance approaching $6 billion, New Mexico lawmakers Tuesday were briefed on some key capital requests that will be weighed during the upcoming legislative session.

“Because of that limited capacity we have to take on a large number of new projects, this makes it extra important to prioritize funding to complete existing projects, or to thoughtfully phase or provide complete funding for large, high-priority projects,” said Cally Carswell, capital outlay analyst for the Legislative Finance Committee.

The meeting follows state lawmakers in November discussing changes to the way the state handles capital outlay, as projects that have been awarded funding fail to materialize and huge sums of money that could be used for other purposes sit in the bank. Discussing the “high-level summary of requests,” Carswell said $1.7 billion in projects have been requested, with executive agencies and judicial entities making requests totaling $1.3 billion and higher education institutions requested about $430 million.

Local governments recently approved their capital outlay requests. Santa Fe is asking for substantially less money from the state this time around: just over $32 million in requests for the 2025 session compared to $150 million for 2024, of which it received just $18.9 million.

Tuesday’s LFC meeting did not offer many specifics in the way of proposed projects, but one major project that came up was a $17.5 million request for supplemental funding to help build a new Magistrate Court in Santa Fe.

“I want to point out that the design is still not complete for this project and appropriations for it date back to 2021 and have totaled $33 million,” Carswell said.

The Administrative Office of the Courts is overseeing plans to build a new Magistrate Court on the city’s south side, behind Kohl’s and near the New Mexico State Police Training Academy. The existing court facility, on Galisteo Street, has inadequate parking, had problems such as mold and a roof leak and is generally too small, an agency official told The New Mexican earlier this year.

With balances of unspent capital outlay so high, some lawmakers pledged in November to finally take action. But there was no further discussion of that at Tuesday’s meeting.

In November, lawmakers received a report prepared by LFC staff showing outstanding capital outlay balances totaled an estimated $5.8 billion across roughly 5,300 projects at the end of the first quarter of the fiscal year. The report said 277 capital outlay projects have seen “no activity, no or minimal reporting, recent reauthorization, significant challenges or delays, or significant unspent funds” since the projects were awarded funding.

Among these “red-rated” projects are the $4.9 million for midtown campus improvements in Santa Fe, the report says. A Santa Fe County Recovery Center facility purchase, funded at $1.5 million in 2022, has also not moved forward, the report states. In the case of the project, the funds are 100% “unexpended,” according to the document.

The report also mentions the Santa Fe Fire Station 2 project, funded in 2023 at $3.9 million with 99% of the funds still unspent, the document states.

Staff writer Carina Julig contributed to this report.

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