Senate panel reviews nearly $3 billion in special appropriations, highlights bigger LFC package

The Senate Finance Committee heard an overview Feb. 4 of competing executive and Legislative Finance Committee (LFC) proposals that together would route large, nonrecurring sums into pilot programs, supplemental appropriations and fund transfers.

Joseph Simon, analyst with the Legislative Finance Committee, told the committee the executive branch had proposed about $2.34 billion in special supplemental and deficiency appropriations from the general fund, plus roughly $325 million in other state funds primarily routed through the Government Results and Opportunity (GROW) Fund. The LFC package, Simon said, contained larger totals in several places and would put about $3.0 billion in general-fund recommendations and an additional roughly $603 million in other state and federal funds into the mix.

The wide gap reflects different strategies, Simon said: the executive frequently proposed multi‑year pilot funding inside agency budgets or other funds, while the LFC often recommended placing money in the GROW Fund or in single large “bucket” appropriations — and funding some items as fund transfers so they can be spread across multiple years.

That divergence shows up across program areas. Simon noted the LFC recommended $75 million for the New Mexico Match Fund versus a $110 million executive proposal; the executive proposed $100 million for a disaster loan recovery fund contingent on legislation; and both plans include substantial housing, behavioral health and broadband items. Marybeth (Deputy Budget Director, Department of Finance and Administration) described the GROW Fund as a three‑year vehicle intended to pilot programs and measure results before folding successful efforts into agency base budgets.

The committee was also told the LFC had used a common tactic of aggregating some small court IT requests into a single $5 million allocation for the Administrative Office of the Courts to allow statewide distribution. Similarly, LFC staff aggregated some agency requests into larger line items intended to be awarded after review.

The presentation flagged several large single items that will receive scrutiny, including recommendations for broadband connectivity, water projects, and the state health benefits program shortfall. Simon pointed committee members to section 10 of the handout where he said more than half of a particular line stems from fund transfers rather than direct one‑year appropriations.

Senators on the committee pressed presenters about why so much spending was packaged as special or nonrecurring rather than added to agency base budgets. Simon and Marybeth responded that many items are explicitly intended as pilot or startup costs — for example, behavioral health and broadband efforts — and that treating them as nonrecurring allows measurement of results before committing recurring funds. They also noted the LFC sometimes included federal match assumptions in its totals that the executive did not.

The committee scheduled follow‑up hearings for departments with the largest or most complex requests and was advised each agency will have a packet with side‑by‑side operating budget and special appropriation details for further questioning.

The presentation concluded with a reminder that special and supplemental spending has grown substantially in recent years, and committee members urged careful scrutiny of high‑dollar items when agency hearings begin.