About $7.6B in New Mexico capital outlay funds remained unspent in recent months, new report says

About $7.6 billion intended for more than 6,400 big-budget projects across New Mexico remained unspent at the end of last fiscal year, according to a new Legislative Finance Committee analysis.

LFC fiscal analyst Ella Hatfield and Director Charles Sallee gave lawmakers on the interim Legislative Finance Committee an update on last fiscal year’s capital outlay projects, a term that refers to major construction projects and significant one-time purchases.

Gov. Michelle Lujan Grisham in March signed off on nearly $1.3 billion in spending for such projects, which ranged from building pickleball courts to State Police facilities.

State lawmakers at Thursday’s hearing said they want to see local communities spend more of the capital outlay money the Legislature awards them.

Sen. George Muñoz (D-Gallup), who serves as vice chair of the interim Legislative Finance Committee, said the state has made progress to that end but acknowledged there is still more work needed.

“The problem, still, is people want money, but they don’t know how to expend it,” he said at the hearing. “Maybe there ought to be a penalty. We’ll give you the capital, but if you don’t complete your project, there should be some type of penalty.”

Sallee acknowledged that problem and pointed lawmakers to House Bill 247, passed during the most recent legislative session, which limits how many times stalled projects can get reauthorized state funding.

“As you were looking at those projects, it was like sand through an hourglass. Every time you came back, they were taking another one off their list,” he said.

The new LFC report, which focused on the final months of the fiscal year that ended in June, identified more than 950 projects statewide with a price tag of at least $1 million and assigned each a grade of “green,” “yellow” or “red.” Green projects are “on track,” meaning they are nearing completion or are in the construction or design phases, whereas red projects have reported no activity or face “significant” delays.

Nearly half of those projects earned a green rating in Thursday’s report.

The report gave just 7% of projects costing $1 million a “blue” rating, meaning they had been completed. Those included more than $10 million spent on renovations for the Albuquerque Rail Yards, $3.5 million spent on gym construction for the Taos Municipal Schools District and $1.2 million spent on Cochiti Pueblo housing renovations.

Nearly one in four of the 951 appropriations discussed in the report fell in the red category. Multimillion-dollar projects with a red grade included $45 million meant for highway projects in southern New Mexico; $29 million for statewide school bus replacements and $18 million for the Santa Fe Magistrate Court.

They also included the Santa Fe Southside Teen Center construction, for which only $40,000 has been spent out of the project’s $1.8 million budget; a Santa Fe Midtown infrastructure project, which still has nearly half of its $1 million budget; and a San Juan County splash pad project which hasn’t spent any of its $1.5 million budget.

State Sen. Linda Trujillo (D-Santa Fe) told Hatfield and Sallee that she was frustrated by how many of the slowgoing projects fell in her district.

“It is rather frustrating, especially when you work really closely with the community,” she said. “All we can do is appropriate the money. We can’t do the contracting, we can’t do the building. When that money doesn’t get spent, it looks like what we’ve done has been for naught.”