Department of Transportation leaders told a legislative committee that New Mexico faces an estimated $5.6 billion shortfall to fix existing pavement and bridge deficiencies and that motorists currently bear about $3.6 billion in annual costs tied to poor roads.

"Half of our State Road Fund is going toward agency personnel related costs," Secretary Ricky Serna told lawmakers, highlighting that DOT’s payroll and overtime total about $250 million annually and that the agency employs roughly 2,500 people.

Chief economist Michael Morrison presented revenue forecasts showing short-term flat receipts for the State Road Fund and a longer-term decline driven by improved vehicle fuel efficiency and other factors. "We expect the State Road Fund to decline," Morrison said, noting the forecast shows a noticeable erosion in real (inflation-adjusted) revenues through 2050 while construction costs have risen sharply.

The department described funding sources and scale: a roughly $1.3 billion DOT budget, about $558 million annually from the State Road Fund (fuel taxes, diesel/special fuel taxes, weight-distance and registration fees), and roughly $558 million from federal highway apportionments. DOT said it manages about 77 active projects totaling $1.4 billion.

Serna and Morrison told the committee New Mexico’s motor-fuel taxes rank among the lowest in the nation and that every penny added to the gasoline tax would yield about $6.8 million annually. They said New Mexico’s existing fuel tax (13–17 cents per gallon as distributed to the road fund) places the state fourth-lowest among neighbors and that vehicle-registration and heavy-truck fees also lag peers — heavy-truck registration in New Mexico is far lower than neighboring states.

Officials reviewed policy options explored by a Sustainable Transportation Infrastructure Revenue (STIR) task force, including tolling, delivery surcharges, expanded weight-distance taxes, EV registration surcharges, and a transportation trust or bonding authority. They recommended care in trusting one-time appropriations and stressed the need for recurring revenue.

Secretary Serna described House Bill 145, a bill that would have authorized the State Transportation Commission to issue up to $1.5 billion in bonds and included roughly $72 million in recurring debt-service revenue; the department said the bill cleared the House but died in the Senate this session. Serna said bonding combined with a dedicated recurring revenue stream would expand maintenance capacity without using one-time general fund monies.

Committee members asked detailed questions. Representative Terrazas asked whether 100% bonus depreciation applied to cannabis-related businesses at the state level; Serna deferred to the earlier tax presenters. Senators and representatives pressed on EV surcharges; Serna said a prior proposal included surcharges of $80 and $120 for full-electric vehicles and reduced amounts for hybrids, but no state surcharge is currently enacted and a federal proposal for a national EV fee did not take effect.

Lawmakers also raised safety and operational issues: Representatives noted recurring damage to guardrails and an isolated bridge strike near Lordsburg with an estimated repair cost of about $5 million; DOT said it pursues claims against responsible carriers but balances recovery efforts with administrative costs. Officials said dust storms and roadway conditions near agricultural or cleared lands (including some utility or solar/wind site work) can exacerbate crash risk and infrastructure damage.

DOT summarized spending and obligations for recent one-time appropriations: roughly $2.3 billion in appropriations by the Legislature and governor from 2019–2025, with the department reporting about 97% of that funding spent or obligated and $189.5 million newly available in 2025. Serna said the department spends roughly $110 million per month when projects are active and believes it has capacity to do more work with stable, predictable funding.

The briefing closed with Serna asking the Legislature to consider recurring mechanisms to fund maintenance and to weigh bonding with clear project-selection guardrails; no bill was enacted during the session, and DOT officials asked for additional legislative direction during the interim.