Fair or unfair, the legislative session that ended about a month ago has become best known for the failure of the Legislature to pass a capital outlay bill. Since then, numerous organizations – noting that state capital outlay spending spurs economic activity – have urged the governor to call a special session for consideration of a public works package.
They’re right; the economic stimulus would be good for New Mexico.
However, it’s important to remember that hundreds of millions of state capital outlay dollars are already in the pipeline. In fact, between capital dollars earmarked for special programs and discretionary capital outlay funding appropriated in past years but still unspent, the state has nearly a billion dollars in capital outlay funds.
Because certain capital outlay funds are earmarked annually, the state will have nearly $30 million this year for water projects and almost $15 million each for tribal projects and infrastructure in the substandard, semirural communities called colonias.
Another $179 million is designated specifically to public school construction, and Senate Bill 291 reauthorizes about $25 million in capital outlay funds allocated in previous years but unused.
Regrettably, also in the pipeline are hundreds of millions more for projects that have become stuck for one reason or another.
The state’s management of capital outlay spending has improved significantly since the Legislative Finance Committee reported a decade ago that the state had significant outstanding appropriations. But problems remain, a fact made clear by the latest LFC quarterly status report on capital outlay.
As of March, almost $110 million for capital outlay projects authorized at least three years ago was still unspent.
Another $148 million in 2013 appropriations and more than $404 million from 2014 were also languishing.
While it is not surprising that much of the 2014 appropriation remains, more than half the 2013 dollars and significant portions of the 2009 through 2012 appropriations are outstanding.
Among the unspent millions are $2.1 million for the Mora County complex, which needs more money before it can be completed; $4.3 million for the demolition of the Fort Bayard Medical Center; $7.8 million for a building at Highlands University; and $15 million for a chemistry building at the University of New Mexico – all projects that have seen little activity.
Quite often, progress stalls because the cost of the project was underestimated or funding was intended only to cover the initial phases of the project. Often, the state agency responsible for oversight does not have the staffing to keep a project moving or a project for a local government gets stuck behind financial reporting requirements.
Sometimes the Legislature funds local projects that never had local support.
The result is inefficiency, incomplete projects and idle tax dollars that could be put to use making a difference for New Mexicans.
Most of those calling for a special session recognize that for a special session to be successful, the House, Senate and executive must overcome the conflicts that led to the failure of the capital outlay package in the first place.
Those difference remain and, while it would be advantageous for the Legislature to pass and the governor to sign a capital outlay bill, those differences might be insurmountable.
A more important use of policymaker time would be to reform the capital outlay process that now too often leads to money being set aside for projects that never happen.
Sen. John Arthur Smith is chairman of the Legislative Finance Committee and Senate Finance Committee. He has represented Senate District 35, which includes parts of Hidalgo, Luna and Sierra counties, since 1989.