House Transportation Committee adopts amendment to DOT operating budget, advances HB3

The House Transportation, Public Works & Capital Improvements Committee adopted an amendment to House Bill 3, the New Mexico Department of Transportation (NMDOT) operating budget, and voted a do-pass recommendation on HB3 as amended during a committee meeting.

The amendment, developed by a consensus technical group of Legislative Finance Committee (LFC) staff, NMDOT and Department of Finance and Administration (DFA) analysts, increases personnel funding, adds targeted road project dollars for state and local projects, and separates large operating categories to improve budget transparency. Joseph Simon, an LFC analyst, told the committee the amendment “includes a total of 249,500,000.0 for personnel,” and assumes a 4% compensation increase in fiscal year 2026 consistent with LFC recommendations.

Why it matters: The amendment shifts resources toward hiring and retaining staff in hard-to-fill positions and adds funding for construction and safety programs that the state flagged as priorities. Committee members pressed NMDOT and DFA staff for details on how projects are prioritized, how federal rules affect local contracting, and how long-term revenue trends — including declining gasoline-tax receipts as vehicles become more efficient or electric — will affect future maintenance and construction.

Most important details

- Personnel and compensation: The amendment earmarks $249,500,000 for personnel across NMDOT’s operating budget, and it factors in employer health insurance increases and a 4% FY26 pay increase as included in the LFC compensation recommendation.

- Project funding added: The consensus group added $5,600,000 for 100% state-funded road projects, $11,800,000 for local and tribal road projects through the Transportation Project Fund and Local Government Road Fund, and $3,700,000 from the State Road Fund to help close local funding gaps when needed.

- Targeted and smaller projects: The amendment provides $1,000,000 for road beautification projects and $16,639,000 for NMDOT’s Target 0 road safety initiative, which the presenters described as part of efforts to reduce New Mexico’s high motor vehicle fatality rate.

- Budget transparency: The amendment separates large line items (for example, road construction vs. road maintenance) so future operating requests will show investments in specific areas more clearly, a change LFC staff said will not require major accounting changes in NMDOT.

Questions from lawmakers and agency responses

- Regional equity and project selection: Representative Dow asked how the department prioritizes projects across regions. Ricky Serna, secretary of the Department of Transportation, said the department uses multiple metrics — safety, pavement and bridge condition, traffic counts, economic development impact and other measures — and offered to provide the committee a table showing those metrics for projects moving forward.

- Local contracting: Committee members asked whether RFPs prioritize in-state contractors. Secretary Serna said federal law prohibits local-preference requirements on federally funded construction projects; however, state-funded maintenance work is typically procured through maintenance agreements that include local contractors and can be used by local governments.

- Revenue outlook and electric vehicles: Representative Borrego asked about long-term declines in gasoline-tax revenue as vehicles become more efficient or electric. Secretary Serna said the department and LFC expect states will need to reduce reliance on fuel taxes and consider alternatives, including road-user charges (fees based on miles driven) and other revenue measures. In committee discussion the secretary gave a multi-decade projection that, according to his briefing, showed a 6% increase in revenues through 2030 followed by declines; he characterized the net projection through 2050 as roughly a mid-teens percent decline and said he would provide the committee with the detailed figures.

Votes and next steps

- Amendment on HB3: Representative Romero moved to adopt the amendment; Representative Borrego seconded the motion. The chair announced that the committee had an amended bill after the vote.

- Final committee recommendation on HB3: Representative Romero moved a do-pass recommendation on HB3 as amended; Representative Brown seconded. The committee recorded a do-pass recommendation and the chair announced a do-pass on the bill.

Context and background

LFC staff told members the consensus amendment was built from the executive recommendation and the department’s request. Committee members discussed the composition of the consensus group (LFC staff, NMDOT, DFA and the House Transportation Committee staff) and asked for further documentation breaking out changes from the base bill. Lawmakers repeatedly urged the committee to consider long-term, recurring revenue solutions for transportation funding rather than relying on one-time appropriations.

Ending

Committee staff and agency leaders said they will provide the committee with additional materials — including the project-selection metrics table and the department’s revenue projections tied to vehicle electrification — as HB3 moves through the legislative process.