Legislative Finance Committee analyst Cally Carswell, Rep. Derrick Lente and Sen. Benny Shendo discuss capital outlay funding with the Senate Finance Committee on March 20, 2025. (Photo by Austin Fisher / Source NM)
The New Mexico Senate on Thursday afternoon approved $1.2 billion in one-time funding for local infrastructure, buildings and equipment in an annual spending bill called “capital outlay.”
Lawmakers pass a capital outlay bill each year to pay for all or part of new infrastructure or construction — projects like buildings, parks, roads or acequia upgrades.
The Senate voted 25-16 in favor of House Bill 450, with Republicans in opposition.
The floor vote came minutes after the Senate Finance Committee passed the bill, which will allocate funds to more than 1,400 projects in all 33 of New Mexico’s counties.
The House of Representatives passed the same version of HB450 on Wednesday; the bill now heads to the governor’s desk.
Sen. Pat Woods (R-Broadview) opposed the bill in committee on Thursday for the same reasons as his House colleagues the day before: Gov. Michelle Lujan Grisham added a $10 million request for the construction of a reproductive health clinic in Northern New Mexico.
“I know the governor has all the rights in the world to put in whatever piece she wants in this,” Woods told the committee. “I’m disappointed it came in so late and that I wasn’t able to see it ahead of time.”
Some of the big-ticket items in the bill include $50 million for public school buildings statewide; $40 million for a forensic unit at the Behavioral Health Institute in Las Vegas; and $40 million for a humanities and social sciences complex at the University of New Mexico in Albuquerque.
Most of the money in the capital outlay bill — nearly $800 million — comes from the state’s General Fund, its biggest single pot of public money, while another $292 million comes from the sale of severance tax bonds and the remaining $132.9 million comes from other state funds.
Legislative Finance Committee staff have recommended lawmakers consider setting an earlier deadline for local capital outlay requests, and creating a basic method of vetting and tracking projects that receive state money.
The Department of Finance and Administration has created an online dashboard that allows people to track capital outlay spending, but lawmakers are considering more changes.
Rep. Derrick Lente (D-Sandia Pueblo) told the committee the capital outlay process is a “work in progress.” He said an LFC subcommittee met over the interim last year to discuss ways to “modernize” the process. He said he expects a minimum funding amount or a “floor” to be one of those changes.
“If we don’t set this floor, we’re nickel and diming this process to a point where they may never be able to spend this money because it’s never enough, and the project continues to go up in price, and at the end of the day, we just continue to add to the unspent balance that we have today,” Lente said.
Overall, $5.8 billion remains in unspent capital outlay funding, said Cally Carswell, principal capital outlay analyst for the Legislative Finance Committee and an expert witness on HB450.
Sen. Michael Padilla (D-Albuquerque) told the committee he coordinates with representatives whose districts overlap with his to collaborate on funding specific projects, and asked if anything can be done to help coordinate capital outlay funding in different parts of New Mexico.
Carswell told the committee similar coordination is happening in several parts of the state, it’s a good practice and tends to lead to more projects getting more of the funding they need. She said after this session, LFC could start looking at “some sort of technological solutions or additional tools” to make it easier for lawmakers to coordinate.
“Capital outlay has to change,” Senate Finance Committee Chair Sen. George Muñoz (D-Gallup) said on the Senate floor on Thursday.
The state currently has 712 active projects, to which lawmakers had given at least $1 million as of September, accounting for $4.3 billion in total, according to data produced by legislative staff.
Of those, 360 are on schedule, 75 are behind schedule and 277 have had no activity, or the local governments responsible have not sold the bonds needed to raise the money, or are facing “significant obstacles to completion,” according to the report.
“We’re spending the money the wrong way. We’re wasting money,” Muñoz told the Senate Finance Committee. “People show up with a project and an idea, and they have no plan. They don’t know what the cost is. They just know we’re giving away free money. Time and time again, we underfund projects and we don’t ever complete them.”
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