New Mexico’s Unspent $6 Billion in Infrastructure Funds Raises Concerns
On January 10, 2024, the Seal of the State of New Mexico was on display inside the Roundhouse (Photo by Anna Padilla for Source NM). As New Mexico In Depth has noted over the years, New Mexico has one of the most unusual methods for allocating public funds toward infrastructure projects. One of the consequences of this distinctive approach to “capital outlay” is that a significant portion of the funds remains unspent for years.
The state’s Legislative Finance Committee recently released a report highlighting the extent of the problem. The report begins by stating that as of June, “outstanding capital outlay balances totaled an estimated $5.9 billion across roughly 5,600 projects.” This large figure comes as no surprise to those who monitor public spending—New Mexico In Depth has been following the state’s spending on brick-and-mortar projects for nearly a decade. The issue of unspent public funds has become a persistent concern.
To be fair, nearly a quarter of the $5.9 billion represents funds allocated during the most recent legislative session. Large infrastructure projects take time to develop, so some delay in spending is expected. However, this still leaves more than $4.5 billion unspent from previous years.
What stands out most within that $4.5 billion is a list of projects where the Legislative Finance Committee has reported “no activity, no or minimal reporting, significant challenges or delays, or significant unspent funds.” This particular category accounts for $347 million of unspent funds as of June, out of an initial $402 million allocated.
One of the most notable examples is the $4.75 million of the $4.95 million appropriated in 2021 for a sports stadium and multipurpose center in Albuquerque. Voters in Albuquerque rejected a $50 million bond intended to help finance the stadium, which would have been used by the local soccer team, New Mexico United. This decision effectively eliminated the need for the state’s contribution toward the stadium. However, there is now a renewed effort to build the stadium at Albuquerque’s Balloon Fiesta Park, which could see the $4.75 million redirected toward that project if it gains momentum.
While following the state’s spending on infrastructure might not capture the attention of most people, for those who do, it reveals an often overlooked “hidden budget” of public dollars. These funds, sitting idle, could be put to use in vital community projects.
Having reported on another state’s system for spending public money on infrastructure before moving to New Mexico, I’ve seen how other states operate in a more structured and strategic manner. Though not perfect, that system was more organized, or what economists might call “rational.” By comparison, New Mexico’s process has appeared less planned and thought out.
As one national expert commented to New Mexico In Depth in 2015, “It certainly wouldn’t be in the textbooks about how to do capital improvement planning. In fact, it would be the illustration about how not to do capital improvement planning.”
In the ten years since that article was published, state lawmakers in New Mexico have taken steps toward more transparency, including disclosing which projects they are requesting funding for. With continued reforms, it’s possible that in another decade, those of us monitoring the state’s spending may be able to describe the system as much more systematic—or rational, as economists might say.
