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LFC staff and legislators press for capital‑outlay modernization to address $7B backlog
Summary
LFC staff told the committee roughly $7 billion in capital outlay remains unspent across about 6,500 projects; staff and members discussed limiting reauthorizations, setting ICIP thresholds, routing water projects through NMFA/Water Trust Board, and prioritizing completion of in‑progress work.
Legislative Finance Committee staff and members outlined a package of policy proposals on how to handle a large backlog of unspent capital outlay funds and to improve project delivery.
Kelly (LFC staff) and Wesley Billingsley briefed the committee on a draft statewide capital framework that staff said covers roughly 6,500 projects with outstanding balances. Staff recommended prioritizing completion of projects that already have appropriations and are underway, expanding maintenance funding for agencies with large statewide footprints, and using a combination of bonding capacity and targeted appropriations for major state projects.
Committee members repeatedly framed the central problem as too many small or poorly planned appropriations that leave projects perpetually underfunded. “We have to be much more relevant in regards to what we’re spending our monies on,” the chair commented during the discussion.
Policy options under consideration include limiting reauthorizations (staff suggested a single time extension), requiring a minimum encumbrance threshold (staff suggested 10%) before a project is eligible for time extension, and requiring that capital requests above a dollar threshold (options discussed between $100,000 and $1,000,000) appear on an ICIP to demonstrate local planning and readiness.
The committee also discussed routing specific water projects (drinking water, wastewater, stormwater, dams) away from piecemeal local capital outlay and instead toward NMFA, NMED, and the Water Trust Board as supplemental requestors through the statewide framework; staff said those programs typically vet and fund projects at larger, more implementable scales.
Members asked staff to draft statutory language and return with fiscal and operational analysis; the subcommittee signaled support for carrying legislative proposals into December and the upcoming 30‑day session.
