Senate committee backs $1.2 billion capital outlay package, voices concern over small grants and unspent balances

The Senate Finance Committee voted 9-1 to give a do-pass recommendation to the House Taxation and Revenue Committee substitute for House Bill 450, a capital outlay package that allocates about $1.2 billion to more than 1,400 projects statewide.

The bill’s sponsors and staff told the committee the package combines multiple funding sources — general fund, severance tax bonds and other state funds — and includes a roughly $50 million closing fund intended to fully fund shortfalls on existing projects. Committee members pressed sponsors and staff about very small line-item appropriations in the bill and the large amount of capital-outlay money the state still holds in unspent balances.

A legislative staff member summarized the bill’s totals to the committee: the substitute “appropriates 1,200,000,000.0 to more than 1,400 capital projects statewide,” and allocates the package across general fund, severance tax bonds and other state funds. That staff member also told senators that Legislative Council Service and Legislative Finance Committee (LFC) staff had checked the math and that the totals were correct.

Committee members and sponsors highlighted several locally targeted increases the legislature added during negotiations, saying the package includes specific injections to finish existing projects. The transcript lists examples discussed in committee as: an additional $8,000,000 for a Curry County waterline expansion; $2,000,000 for a skilled nursing facility in rural River County; $1,300,000 for an early childhood facility in Eunice; $1,100,000 for a real-time scribe center in Las Cruces; $1,600,000 for water-system improvements in Maxwell; $975,000 for housing infrastructure in Harding; $3,375,000 for a Pueblo behavioral health facility; and $1,000,000 for a community services complex in Jemez Pueblo. Committee staff said the bill also includes a chart that lists projects and amounts by county.

Several senators criticized how the capital-outlay process produces very small appropriations for complex projects, calling the practice “nickel and diming” and pointing to the state’s large unspent capital balance. Committee discussion repeatedly referenced a statewide unspent balance in the billions; staff reported recent quarterly totals near $5.8 billion and senators said the number could be at or above $6 billion when new appropriations are counted. That dynamic prompted calls from multiple senators for a minimum appropriation threshold, better regional coordination among legislators and more on-site vetting of large projects before session.

Sponsors and staff said the committee retained about $50,000,000 as a closing fund during negotiations to allow the legislature to fully fund certain projects that otherwise would remain short. Staff also said LFC staff routinely tours and vets larger projects during the interim to check readiness and design and to assess whether projects are shovel-ready.

A motion for a do-pass recommendation was made by Senator Gonzales and seconded (second not specified in the transcript). The committee then took a roll call vote. The recorded votes in committee were: Senator Campos — yes; Senator Gonzales — yes; Senator Lanier — yes; Senator Padilla — yes; Senator Steinborn — yes; Senator Tobias — yes; Senator Trujillo — yes; Senator Woods — no; Senator Shindo — yes; Senator Munoz — yes. The committee reported the bill with a do-pass recommendation, 9 in favor and 1 opposed.

Committee members noted possible executive action on some line items and said future sessions should consider stronger internal guidelines or statutory changes to reduce very small project appropriations. Several senators said the Legislature should focus on completing larger projects rather than repeatedly funding partial amounts that leave projects incomplete.

The committee adjourned after the vote and planned to return the bill to the floor for further consideration.