New Mexico State Struggles with $5.9 Billion in Unspent Capital Outlay Balances: New Report Highlights Issues
According to New Mexico’s approach to public funding for infrastructure projects remains notably unconventional. This unique method, known as “capital outlay,” has resulted in a significant portion of public funds remaining unspent for extended periods.
Current State of Capital Outlay
The latest report from the Legislative Finance Committee (LFC) reveals that, as of June, New Mexico has an estimated $5.9 billion in outstanding capital outlay balances spread across roughly 5,600 projects. This figure highlights a persistent issue with unspent public funds.
Distribution of Unspent Funds
Of the $5.9 billion, approximately 25% consists of money authorized during the current year’s legislative session. While it is common for large projects to take time to complete, over $4.5 billion remains unspent from previous years. This indicates ongoing inefficiencies in the state’s capital outlay process.
Problematic Projects
The LFC’s report identifies $347 million of unspent funds from a total of $402 million designated for projects facing significant issues. These issues include lack of activity, minimal reporting, and major delays. Notably, the $4.75 million allocated for a sports stadium and multipurpose center in Albuquerque, which was canceled after a failed bond vote, remains unused. This funding may potentially be repurposed for a new stadium proposal at the Albuquerque Balloon Fiesta Park.
Insights and Comparisons
Tracking public spending on infrastructure might seem routine, but it sheds light on crucial aspects of public finance management. My experience with capital improvement processes in other states shows that New Mexico’s method is less systematic compared to others.
Criticisms and Future Outlook
A national expert previously criticized New Mexico’s capital outlay process as a prime example of how not to handle capital improvement planning. Despite recent improvements, such as increased transparency with lawmakers disclosing funded projects, the system still faces significant challenges. Continued reform efforts may eventually lead to a more organized and efficient capital outlay process in the future.
