Legislative Finance Committee

The Legislature should consider taking steps to reduce the amount of outstanding capital outlay balances, including more careful vetting of some projects, limiting appropriations to water systems that can be funded through grants, and restricting the reauthorization of funds for idle projects.

At the end of FY25 on June 30, outstanding capital outlay balances totaled an estimated $7.2 billion across roughly 6,500 active projects, with more than $1.8 billion of that for 4,182 “local” projects, building and equipment projects funded at the discretion of individual legislators and the governor.

New Mexico’s universal school program has made progress in expanding participation and access, but its long-term impact depends on improved oversight, implementation, and quality standards.

Demand for student housing at the state’s four-year colleges is up, with housing at four of the five schools at or above capacity, but schools report aging buildings with hundreds of millions of dollars in repair needs.

New Mexico spends more on higher education than almost any state but fewer students than the national average complete their degrees, suggesting the state should adjust the higher education funding to reward student retention.

Current funding for early childhood care and education programs is enough to ensure all low-income 3- and 4-year-olds have access to childcare, prekindergarten, or Head Start, but some areas of the state are underserved and not all programs prepare young children for future academic success.

Estimated recurring revenues are expected to grow by less than a half percent in the current budget year and about 3 percent in the budget year that starts July 1, 2026.

A $170 million investment intended to boost the number of nursing, teaching, and social work graduates, mostly by adding college faculty, is falling short, with colleges and universities slow to implement programs.