SANTA FE, N.M. (KRQE) – It’s a treasure trove of public money intended for transformative, community-changing projects across New Mexico. But hundreds of millions of dollars that have been earmarked for public projects sit unused, waiting to be spent — sometimes waiting for years.

While the state is “flush with funding,” more than $1.5 billion in approved capital improvement funding remains unspent, according to a report from the Legislative Finance Committee (LFC). And ultimately, the state has no way to track if spent funds do support the public, the report says.

“Strong state revenues and an influx of federal funds combined with supply chain, construction cost and labor issues associated with the pandemic are contributing to large outstanding balances across thousands of active projects,” the report says. “In the coming year, balances are likely to grow and bottlenecks further tighten when $2.2 billion in new appropriations to over 1,400 additional state and local projects come online.”

To get some perspective on the issue, KRQE News 13 spoke with Pete Campos, a state senator for several counties in Northern New Mexico. For years, he’s been vocal about problems with the state’s capital outlay system.

“It’s very unfortunate,” Campos says. “One of the things that is important for us is to plan projects, get these projects out to the various communities. And what that means, basically, are jobs for our communities, improvements to the very basic health issues throughout the state which include water — and that’s one that’s at the top of the list. And then of course, basic facilities for our senior citizens and for the various communities.”

Ultimately, unspent funds can be returned to the state for other projects, Campos says. But in the meantime, having the funds tied up in unfinished projects means the cash can’t be used on other would-be projects.

Defining capital outlay

The funds — called capital outlay — are intended to fund projects that benefit the public. Bridge repair, building a community center, fixing potholes, and similar improvement projects are fair game for the state funds.

For example, in Albuquerque, capital outlay funding has helped the City move forward on various repairs to the Rail Yards property, among dozens of other projects over the years. The money is available for a wide array of public institutions, including cities, counties, and other municipalities, state departments, and even public universities like the University of New Mexico and New Mexico State University, among others.

Before every legislative session, community organizations and local government departments submit project proposals to their legislators. Those legislators then request funding for each project during the legislative session. Over the last seven years, the total amount of approved funding ranged from $38.5 million to more than $1 billion per year, according to data compiled by the LFC.

But just because those projects are approved for funding doesn’t necessarily mean the projects are ever completed.

Of the 3,300 or so projects currently underway, about 2,000 haven’t gotten to the ground-breaking stage of construction yet, according to the report. And many projects haven’t even made it through the planning and design phase, according to the LFC.

As of March 2022, 1,504 projects were still under design, the statewide numbers show. An additional 475 projects hadn’t even received a budget, let alone a construction design or plan.

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Across the state, each county has unspent capital outlay funds. But a few counties have a higher percentage of unspent funds per project. Data from NMDFA.

Is the key to success better project vetting?

“The number of funded projects that are not shovel-ready reflects, in part, inconsistent vetting prior to funding,” the LFC report notes. Most statewide projects go through a vetting process to ensure the projects can be completed. But local projects — such as requests for new park landscaping or city memorials — generally don’t undergo a formal vetting process, the report notes.

Campos says that project vetting is a key issue. “The whole key that is fundamental to us is: ‘How can we utilize the resources effectively for the common good?'” he says. “And so as we see over a billion dollars that has been not spent, it’s important to us to reassess those resources.”

According to Campos, vetting projects means spending time with the community that the project is intended to help and working with engineers or others involved in each project. The good news is that he says legislators have been getting better at that.

“I really want to commend legislators, because they’re realizing that the vetting is very important,” he says. “Legislators are spending more time out in communities, evaluating projects. But at the same time, there are a lot of these projects that are in dire need of the full vetting process.”

Another issue, Campos says, is that many projects aren’t fully funded. This means they receive allocations, but not enough to complete the project. He gives the example of Peterson Dam in his district.

“Completing Peterson Dam in Las Vegas would require about $12.5 million today,” he says. But this year, each senator was only allocated a little over $3 million for all projects in their district.

So even if he put his entire allocation to that one project, he couldn’t get it done. “That in no way is enough to even complete one of the very basic projects that is very important in the Las Vegas area,” he says.

How does the state track a project’s status?

The LFC keeps track of progress on each capital improvement project. Those with the least amount of progress towards completion are marked as “red-rated.”

Among those red-rated projects are a would-be expansion to parking facilities at the Santa Fe Airport, an affordable housing project in Albuquerque, water system decontamination for Curry and Otero Counties, improved door locks for New Mexico Tech, and 85 other projects. Many of those projects have more than $1 million in unspent funds.

Recently, some of the uncompleted projects have been delayed due to rising construction costs and supply chain delays, according to the LFC.

“Supply chain issues that arose during the Covid-19 pandemic continue, and long lead times for materials are a significant source of uncertainty for construction timelines,” the report says. “Lead times for delivery of materials as long as 22 weeks were reported by project managers at the General Services Department-Facilities Management Division’s April meeting.”

But part of the issue is also the way New Mexico finances public infrastructure, the report notes. “Economic conditions that may or may not be temporary and systemic issues unique to New Mexico’s approach to financing public infrastructure both present barriers to timely completion of capital projects.”

In 2022, more than $827 million in additional and renewed projects were approved by the legislature. But for the first time in New Mexico history, the legislators requesting each project had to attach their name to their requests. Campos says that this added transparency is a step in the right direction.

“This will give us an idea where the needs are, how these projects are being funded, and then from there who’s participating in the funding of these projects,” he says. “Transparency always has helped to improve processes.”

Most state representatives received around $1.86 million for projects from the 2022 appropriations. Most senators received around $3.1 million. Projects sponsored by Governor Michelle Lujan Grisham totaled $160 million, according to a LFC tally. Her projects span multiple counties — from $50,000 for a new vehicle for the Rio Rancho Police Department to $14.5 million for the construction of a gas pipeline in Taos County.