Legislative Finance Committee

The Department of Transportation reports an overall deterioration of the state’s roads, with the 2024 annual road condition survey noting the lowest ratings in recent history, even as the Legislature might lose flexibility to supplement road funding.

The number of nonrecurring appropriations made by the Legislature to local governments has jumped from one for $250 thousand in FY18 to 33 for $232 million in FY26. At the same time, state capital outlay appropriations to local governments increased by 431 percent.

The Legislature has invested in high school career and technical education pilots and classroom infrastructure, but simply increasing funds for career and technical education may not lead to more robust programming and could lead to inefficient spending practices or reinforcement of the status quo.

General fund reserves have enough revenue to cover a “worst case” economic downturn, but current liabilities limit budget growth.

Despite spending more to provide healthcare to fewer New Mexicans, quality and access in the Medicaid program have changed little.

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.