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LFC briefing: executive-order emergency spending needs clearer statute and reporting; committee presses DHSEM on reimbursements
Summary
Legislative Finance analysts told the subcommittee that New Mexico issued more than 463 executive orders in FY25'FY26 authorizing roughly $340 million in emergency spending, and they and DHSEM urged legislative fixes to reporting, funds structure and reimbursement timelines after members pressed for accountability on large encumbrances.
Legislative Finance Committee analysts Scott Sanchez and Austin Davidson told a Legislative Finance subcommittee that New Mexico's executive-order emergency funding system has not kept pace with recent disasters and that statutory ambiguity and reporting gaps have exposed the state to fiscal risk.
"The executive has issued over 463 executive orders between FY25 and so far in FY26, with roughly $340,000,000 authorized in emergency spending," Sanchez said, and Davidson added that a large share of that funding has gone to firefighting, debris removal and flood response with approximately $205,000,000 authorized for the Department of Homeland Security and Emergency Management (DHSEM).
LFC analysts said they built a database from the state's SHARE financial system to map allocations and found about 90 executive orders lacking a clearly identified funding source in SHARE; they also pointed to the practice of drawing on the general fund operating reserve when the appropriation contingency fund (ACF) is exhausted and said statute does not clearly authorize that practice.
The brief offered policy options: codify clearer statutory rules for the life and reversion of executive orders, create a separate disaster fund with explicit reporting, consider removing or raising the per-order $750,000 cap, and adopt mandatory timelines and formats for post-emergency reporting.
Deputy Secretary Ali Brown and Ally Ryan, DHSEM's state director (who participated in the hearing), described the operational side: DHSEM manages procurements and contracts under emergency procurement rules, monitors work through contractor reporting and monitoring contracts, and compiles documentation for federal reimbursement. Ryan described the FEMA reimbursement workflow and timeline: work must be completed and documented, DHSEM compiles and reviews invoices, the state secretary reviews larger amounts and items over $1,000,000 may require congressional approval before federal reimbursement.
Committee members pressed DHSEM about fiscal exposure. Vice Chair Munoz said the executive's use of reserves amounted to an appropriation of roughly $330,000,000 "without legislative approval," and members demanded spreadsheets showing encumbrances and reimbursements by disaster (DHSEM said it would provide such a spreadsheet). Members also focused on Ruidoso: LFC estimated about $200,000,000 in executive-order allocations for Ruidoso and DHSEM said two debris-removal contracts are complete and the agency is close to submitting roughly $150,000,000 for FEMA reimbursement.
Legislators raised procurement and local-economy concerns after large debris-removal contracts were awarded to out-of-state firms; DHSEM defended its RFP processes but acknowledged bonding and capacity barriers for some local contractors and said primary contractors were contractually required to hire local subcontractors when feasible.
The subcommittee directed LFC and DHSEM to continue providing detailed expenditure and reimbursement data and signaled interest in pursuing statutory changes such as a dedicated disaster fund and clearer reporting deadlines.
