SENATE JOINT MEMORIAL 24

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Pete Campos

A JOINT MEMORIAL

REQUESTING THE NEW MEXICO FINANCE AUTHORITY OVERSIGHT COMMITTEE AND THE GOVERNOR TO APPOINT A WORKING GROUP OF COMMITTEE MEMBERS AND REPRESENTATIVES OF STATE AGENCIES, LOCAL GOVERNMENTS AND FEDERAL AGENCIES THAT FUND CAPITAL PROJECTS IN NEW MEXICO TO STUDY THE CURRENT CAPITAL OUTLAY PLANNING, FUNDING AND MONITORING PROCESSES AND STATE, STATEWIDE, REGIONAL AND LOCAL INFRASTRUCTURE NEEDS AS SHOWN BY CURRENT STATE CAPITAL PLANS AND LOCAL GOVERNMENT INFRASTRUCTURE CAPITAL IMPROVEMENT PLANS AND MAKE RECOMMENDATIONS TO THE SECOND SESSION OF THE FIFTY-THIRD LEGISLATURE FOR IMPROVEMENTS TO THE PROCESS.

     WHEREAS, New Mexico is one of few states that funds local capital outlay projects with state taxes and is able to do so because of the severance tax bonding fund, created in 1961, and through the voters' approval of state general obligation bonds; and

     WHEREAS, over the more than fifty-five years of the severance tax bonding fund, the legislature has taken different approaches to selecting and funding state capital improvements and did not routinely fund local projects until the mid-1980s; and

     WHEREAS, the legislature created the New Mexico finance authority in 1992, at the urging of the late Senator Eddie Lopez, as a type of "state bank" to help local governments fund capital projects; and

     WHEREAS, at the same time, the legislature created the New Mexico finance authority oversight committee, which was directed in statute to:

          "C. monitor and provide assistance and advice on the public project financing program of the New Mexico finance authority;

          D. oversee and monitor state and local government capital planning and financing and take testimony from state and local officials on state and local capital needs;

          E. provide advice and assistance to the New Mexico finance authority and cooperate with the executive branch of state government and local governments on planning, setting priorities for and financing of state and local capital projects;..."; and

     WHEREAS, New Mexico law also requires that: "The department of finance and administration and the general services department shall jointly prepare, amend and maintain a four-year program of major state capital improvement projects recommended to be undertaken by the state or to be undertaken with state aid or under state regulation."; and

     WHEREAS, systemic planning for capital needs at the state level is hampered by the significant number of state agencies or boards that control portions of either funding or planning, including the local government division and the capital outlay bureau of the department of finance and administration, the facilities management division of the general services department, the cultural affairs department, the department of transportation, the department of environment, the aging and long-term services department, the office of the state engineer, the interstate stream commission, the higher education department, the public school capital outlay council, the Indian affairs department, the water trust board, the tribal infrastructure board, the colonias infrastructure board and the New Mexico finance authority; and

     WHEREAS, many times agencies delegate even their vetting powers to the legislature so they do not have to make potentially unpopular decisions of saying "No" to capital projects; and

     WHEREAS, the legislature is too often faced with capital outlay requests that reside at the extremes, those that are either much too costly or so small that local governments should be able to fund them with their own resources; and

     WHEREAS, the lack of coordination between state, federal and local funding sources has been shown over and over in the number of projects that are reauthorized or voided because they could not be done with the funding supplied by the legislature; and

     WHEREAS, the legislature and the executive have made strides in improving the funding process over the years as the state has faced declining oil and gas revenues that have provided less money to meet billions of dollars of unmet needs for maintaining and improving state assets and funding statewide, regional and local projects; and

     WHEREAS, still more needs to be done to ensure that the state as a whole has a vision and a master plan for New Mexico that systematically meet the capital needs of the state and local governments; and

     WHEREAS, funding for capital projects, particularly for constructing special facilities, is a three-prong exercise:

          A. there must be sufficient planning to realize the project in the most efficient and cost-effective manner;

          B. there must be sufficient funding to begin and finish the project in a timely manner that meets federal Internal Revenue Code requirements for tax-exempt bonds; and

          C. the public owner must have a sufficient budget to staff and maintain the project; and

     WHEREAS, the effective use of cogent state and local policies for planning, funding and operating capital projects not only allays the fears of bond rating agencies but signals to potential businesses that New Mexico is on the right path to success and assures taxpayers that state resources are being put where they are needed most to improve the lives of all New Mexicans;

     NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the New Mexico finance authority oversight committee and the governor appoint a working group of committee members and representatives of state agencies, local governments and federal agencies that fund capital projects in New Mexico to study the current capital outlay planning, funding and monitoring processes and state, statewide, regional and local infrastructure needs as shown by current state capital plans and local government infrastructure capital improvement plans and make recommendations to the committee and the second session of the fifty-third legislature for improvements to the process; and

     BE IT FURTHER RESOLVED that the oversight committee staff take the lead in staffing the work group, but that other legislative staff and state agencies provide assistance as needed; and

     BE IT FURTHER RESOLVED that the working group report to the New Mexico finance authority oversight committee by November 15, 2017 with its recommendations and that the committee report its recommendations to the second session of the fifty-third legislature for improvements to the process; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the New Mexico legislative council, the New Mexico finance authority oversight committee and the governor.

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