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May 6, 2016

New Mexico State Legislature Proposal Calls for Reforming Controversial Capital Outlay Process

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Last year, members of the New Mexico State Legislature ended their 2015 session disagreeing over what the year’s capital outlay budget should look like and contain.

Amidst criticism from lawmakers and legislative observers that the lack of such a budget, used for funding a wide variety of road and other infrastructure projects, would prove disastrous for New Mexico’s economy, a second one-day session was later called for the express purpose of finally passing an updated package.

Now a bill introduced in the House Ways and Means Committee will change the way New Mexico handles its entire capital outlay procedure.

“In the 2015 special session, the legislature enacted a capital outlay bill in which every Senator was given $1 million to spend in their sole discretion, and every House member was given $600,000 to do the same,” notes Fred Nathan.

“When you add that up, that is $84 million that was allocated on the basis of a political formula,” continues Nathan, who is the executive director of the Santa Fe-based think tank called Think New Mexico.

House Bill 307, by contrast, calls for the creation of a 13-member planning commission whose task would be to independently review and prioritize capital outlay projects.

That commission, composed of members from both the executive and legislative branch, would then put together a list of possible projects submitted by state agencies, counties, and cities, ranking those projects in terms of their importance and need.

Under the new proposed system a “5 to 6-year plan would be developed so multi-year projects would receive sufficient funding to complete the project,” says Nathan.

Reforming the state’s capital outlay process is a topic that has engaged lawmakers for years, and has been proposed by both former Democrat Governor Bill Richardson and current Republican Governor Susana Martinez.

In an interview with the Santa Fe New Mexican, Representative Zach Cook acknowledged dissatisfaction with the way the legislature has traditionally decided on capital outlay projects for any given year.

“As long as I have been here, I’ve never been happy about the capital outlay process,” said Cook, who is the author of HB 307, adding “I’d like to get to a more efficient and effective way to do capital outlay.”

A push to reform and modernize the process has additionally been bolstered by a report released in January by the Legislative Finance Committee, documenting a large number of projects around the state that were slated for capital outlay funding but somehow never got it.

According to the report, the unspent capital outlay funding as of last fall was in excess of $1 billion, a result Nathan attributes to “poor planning.”

Nathan adds that if HB 307 passes the full legislature and is signed into law by Governor Martinez, the prospect of funds going unspent will be eliminated for the simple reason that “there will be a long-term plan and some predictability, and consequently builders will have some time to plan ahead and hire personnel.”

A reformed process would also do away with such ephemeral projects as sculpture gardens and kitchen equipment for senior citizen centers, creating at the same time, says Nathan, a process that will be “more transparent than the current process which is done mostly in secret.”

That process, according to critics of the current system, is of particular concern, given the large amount of money involved: legislators this year will have at their disposal some $123 million, backed by revenue from New Mexico’s severance tax, to spend on a wide array of topics.

While support for a reformed process appears strong – including the likelihood that Governor Martinez will sign such legislation – the largest question remaining is whether there is enough time left in the current session to study and pass the bill, as the legislature will wrap up business at noon on February 18.

 

By Garry Boulard

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