For the state's capital spending to hit the headlines in mid-year is unusual. But then headlines sometimes result from the work of the Legislative Finance Committee, which does oversight and builds a budget providing the Legislature an alternative to the Governor's budget.

Much of the LFC's oversight work is nuts-and-bolts stuff, both needed and boring to most.

However the report released June 12 at the LFC's meeting in Las Cruces got attention. The title: Review of Selected Capital Outlay Projects' Planning, Spending, and Outcomes: Public Prisons. The short version is that $277 million is the estimated cost of repairing the state's prison system. The number drew the media, as well it should.

Capital spending authorized by the 2014 legislature will come to $714.2 million, assuming all the authorized projects get done, which never happens. House Bill 55, one of two major capital spending bills, authorizes $228.7 million for 852 projects including $2.4 million for four projects at corrections facilities.

In her executive message to the Legislature, an eight-page letter to House Speaker Ken Martinez, Gov. Susana Martinez listed 73 separate line-item vetoes. The vetoes hit groups of lines, single lines, parts of lines and punctuation. It was not a good year for semicolons.

The governor also joined just about everyone else around the state with capital spending priorities backward.

Understanding this conventional wisdom is important.

"I firmly believe that when capital outlay funds are used correctly, they can achieve two overriding goals for communities throughout the state," the governor wrote. "First, they can result in substantial construction projects that put local contractors to work and also lead to the hiring of new employees and the purchase of materials from small businesses. Second, they can represent an investment in critical infrastructure projects that stretch across local jurisdictions and, in many cases, have price tags that local governments would not be able to afford on their own."

No, governor, the jobs aren't the first priority. The point should be those "critical infrastructure projects." Jobs and sales for small business are a virtuous corollary but that's all.

For those who have heard the words (or maybe haven't), capital spending creates future benefits as opposed to paying for daily operations. What is called capital spending generally is not consumed in one year, but rather is spending on stuff that lasts a while.

The money comes from a number of places. The LFC summary shows the two major bills together authorizing $395.7 million for infrastructure projects statewide, $175.2 million from supplemental severance tax bond capacity for schools and $57 million administered by the Water Trust Board, the New Mexico Finance Authority (for colonias), and the New Mexico Tribal Infrastructure Board.

Sen. Carlos Cisneros, Questa Democrat, shepherds general obligation bond projects. His two bills were Senate Bill 53 for projects and SB 163 to reauthorize projects that were incomplete at the end of their allotted time.

At the bill finder sector of the Legislature's website, a search for "capital outlay" generates a six page list. Of those, 17, including HB 55, might be called main bills, six in the House and 11 in the Senate. Four passed; one was vetoed.

Legislators request capital projects, some of the usual infrastructure sort and others, ah, unusual.

Sen. Michael Sanchez, Belen Democrat and majority floor leader, sought $165,000 "for artwork for a theme park of Indians in Angel Fire in Colfax County."

Rep. Jeff Steinborn, Las Cruces Democrat, asked $2.1 million "to plan, design and construct improvements to Airport road and Industrial road in Santa Teresa in Doña Ana County."


Harold Morgan has tracked the New Mexico economy for decades. He was editor for 20 years and publisher for four years of Progress, a business newsletter and was the founding editor of the New Mexico Business Journal.