Committee reviews HAFC changes to HB2, flags dozens of special appropriations for follow-up

The Senate Finance Committee on Feb. 24 reviewed HAFC’s adjustments to House Bill 2, the omnibus budget bill, and flagged a series of new special appropriations and contingent fund transfers that committee members said need more detail before a final vote.

Budget staff walked committee members through HAFC’s changes to the LFC (Legislative Finance Committee) recommendation, identifying dozens of additions and reauthorizations that move money into “specials” and earmarks rather than into recurring appropriations.

Charles (budget staff) said HAFC started from the LFC recommendation “and then adjusted from there,” and read a long list of line-item changes. Notable HAFC additions included a $110,000,000 special for transitional housing (with $80,000,000 earmarked for Albuquerque/Bernalillo County and $10,000,000 for Las Cruces/Dona Ana County), $7,600,000 for local public-safety infrastructure with border earmarks, $20,000,000 for DoIT cybersecurity initiatives, and multiple economic-development appropriations that together staff estimated could approach $200,000,000.

Committee members repeatedly asked staff to “flag” items for follow-up. Senators flagged large economic-development earmarks — including $15,000,000 for Quantum Venture Studio, increases for the New Mexico Partnership, and a package of trade-port and innovation-hub funding — and asked for details about agency capacity to administer sudden large injections of money. “That's a lot of money in economic development,” one senator said while asking staff to provide program descriptions and legislation links.

Members also flagged water- and environment-related additions and reauthorizations: $5,000,000 added for Indian water-rights settlement beneficiaries, reauthorizations for prior water litigation and settlement spending, $40,000,000 proposed for the strategic water supply grant program that staff said is contingent on legislation, and a $50,000,000 HAFC addition described as funding cleanup of contaminated sites (including abandoned uranium and non-uranium contamination). Staff noted that some of the contaminated-sites funds are limited in legal use (for example, uranium funds may be restricted to uranium cleanup).

Public-safety and health items drew scrutiny. The committee flagged $4,000,000 added to a law-enforcement recruitment and retention fund, $2,000,000 moved to a Sentencing Commission grant program, and a $3,300,000 meat-processor assistance package in agriculture. Members questioned why a $400,000 local appropriation for a Chaparral public-safety campus was included as a special rather than capital outlay. Staff responded this was HAFC’s choice and the committee placed the line on a follow-up list.

Staff repeatedly warned members that some items are contingent on other bills or grants: several appropriations were labeled “contingent on enactment” of specified legislation. For example, staff said the strategic water supply additions were contingent on House Bill 137 (or similar legislation) and that some economic development transfers referenced companion bills.

On reauthorizations and encumbered balances, staff told the committee there were hundreds of millions in prior appropriations with remaining balances and asked whether to extend spending authorizations. “As of Feb. 24, there’s $264,000,000 in reauthorization requests in HB2 that have balances that are unexpended or unencumbered,” staff said; an additional $187,000,000 appeared encumbered under valid contracts.

Committee members also requested follow-up on program details: how local fire and law-enforcement recruitment grants are being phased in, whether multiple weatherization and wildfire hardening requests duplicate each other, how PFAS testing in Curry County would connect to capital projects, and where broadband and trunk-radio projects appear in capital versus operating budgets.

Nut graf: The hearing made clear HAFC’s version of HB2 shifts money into large “special” appropriations and targeted economic-development packages that senators said require more documentation and statutory links before the Finance Committee advances the budget. Committee staff will return with more detail on flagged items, contingency language, and prior-year spending balances.

Committee next steps: staff were asked to gather cost histories, statutory citations, agency capacity statements, and bill references for all flagged items. Senators said they will begin follow-up hearings with agencies that received major adds (public education, early childhood, higher education, and DFA) and will consider forming subgroups to vet capital and special-appropriation requests before final floor action.

Ending: The committee did not adopt any final appropriations at this hearing; members closed by assigning follow-up work, with staff returning to answer the flagged items and to trace contingent legislation tied to larger transfers.