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Senate Finance hears LFC capital framework and proposals to limit reauthorizations, steer stalled funds to a capital reserve
Summary
Kelly Carswell, the LFC capital outlay analyst, told the Senate Finance Committee the Legislative Finance Committee's statewide capital outlay framework proposes roughly $525 million in projects and recommends policy changes to reduce a large backlog of unspent appropriations.
Kelly Carswell, the LFC capital outlay analyst, told the Senate Finance Committee the Legislative Finance Committee's statewide capital outlay framework proposes roughly $525 million in projects, split among general fund, severance tax bonds and other state funds, and that the LFC and executive recommendations differ by several large projects.
"The LFC framework proposes a statewide capital outlay package totaling about $525,000,000," Carswell said, and she listed areas of divergence with the executive recommendation, including a larger executive request for an Executive Office Building, a Santa Fe fire‑training academy, DOT heavy equipment and other one‑off projects.
Why it matters: Committee members and staff described a growing backlog of unspent capital appropriations and identified programs and administrative changes intended to increase completion rates and reduce stranded funds. Carswell and Wesley Billingsley of DFA said the capital program has several causes for delay, including rising construction costs, partial or piecemeal funding, and insufficient up‑front project planning.
Proposals to reduce stalled projects: LFC staff identified about 300 projects with essentially unused balances (0–1% spent) and proposed several options for the committee to consider: (a) route reversions of future general‑fund capital appropriations to the new Capital Development and Reserve Fund, (b) prohibit reauthorization this session of projects with a 2025 reversion date that show no activity (with tribal project exceptions), (c) limit reauthorizations to a single one‑year extension and require at least 40% encumbrance at reauthorization, and (d) require future capital requests be scoped as planning/design, equipment, or construction with supporting documentation for construction requests.
Staff emphasized technical support and alternatives: DFA staff said the infrastructure division can help small local governments with applications and technical assistance. Carswell noted that some specialized grant programs (for water, wastewater and roads) deliver larger average awards and better outcomes than piecemeal capital outlay appropriations, and recommended steering applicants to those programs first.
Numbers and scale: Committee members highlighted the size of outstanding balances. Staff estimated roughly $5.8 billion in outstanding capital appropriations and showed that the Water Trust Board and similar targeted programs award larger, more spendable grants for infrastructure work. The LFC recommended a $24 million initial appropriation for project completion grants from the Capital Development and Reserve Fund, subject to the committee's direction.
Concerns and next steps: Senators pressed staff that strict limits on combining planning/design with construction or on one‑time reauthorizations could penalize small communities lacking technical capacity. Members asked for a phased approach and for more time to notify local grantees before automatic reversions. The chair directed staff to take the proposals back for refinement and to engage caucus offices and local partners before formal bills or rules are drafted.
Ending: No formal vote took place. Staff said they will circulate more detailed project lists, follow up on unspent appropriations, and meet with members' offices to refine approach and language.
