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LFC unveils interactive county finance tool showing sharp rise in fund balances
Summary
LFC evaluators presented a new interactive report and evaluation brief that converts local government audit data into comparative dashboards, finding aggregate county governmental fund balances rose roughly 140% from FY18 to FY24 and cautioning some counties show declining liquidity ratios.
The Legislative Finance Committee on Tuesday heard a walkthrough of a new LFC evaluation brief and interactive web tool that pulls local government audit data (FY18–FY24) into a searchable, comparative dashboard intended to help legislators and local officials assess fiscal health.
Matt Goodlaw, an LFC program evaluator, said the first phase analyzes county balance sheets and found “current assets are rising substantially faster than current liabilities,” producing an aggregate increase in county governmental fund balances of roughly 140% between FY18 and FY24. Goodlaw said nonrecurring appropriations and capital outlay grew dramatically in recent years; the brief notes FY26 nonrecurring appropriations to local governments were many times higher than FY18 levels and capital outlay rose 461% over the period.
Elizabeth Dodson, who co‑authored the brief, explained the tool calculates liquidity ratios (cash, quick, current) so members can see whether counties have cash on hand to cover short‑term liabilities. She told the committee that median liquidity ratios for New Mexico counties in FY24 were well above typical industry thresholds, but cautioned that some counties show declining ratios over time and that a falling trend could signal emerging fiscal stress even if the absolute ratio remains high.
The brief also previews revenue and expenditure patterns: the five largest counties generate about 87% of operating revenues from taxes while the smallest counties rely more heavily on intergovernmental transfers. The presenters emphasized the tool’s ability to let users compare counties of similar size, examine fund‑balance categories (assigned vs. unassigned) and drill into specific audit lines.
Members asked for county‑level drilldowns, clarification on Local Government Division (LGD) recommendations for fiscally challenged entities (such as suggested freezes on vacancies and nonessential contracts), and whether the interactive report could be used to inform capital outlay decisions. Goodlaw said the LFC has presented the tool to the Association of Counties and the League of Municipalities and will expand the report to include more statements and metrics.
Presenters asked members to use the interactive report to refine questions for local officials during the capital outlay cycle and offered to facilitate follow‑up briefings with local finance staff.
