Nearly every dollar the state of New Mexico uses for capital investment projects like infrastructure comes from oil and gas revenue.
While that isn’t a big problem now, it could become a serious issue in the future as oil and gas production drops as the nation moves to cleaner forms of energy.
State economists say New Mexico’s bond rating is already in the bottom 20% nationally and it could get worse without a better way to fund capital projects.
They are advising state lawmakers to create a Dedicated Infrastructure Division within the Department of Finance and Appropriations. The division would dig into capital funds for local projects to see which should be given state dollars.
Legislative Finance Committee Principal Analyst Cally Caswell told lawmakers there is already way more demand for state funding for local projects than there are capital dollars available.
“This leads to things like the problem of piecemeal funding,” she said. “Capital outlay is really not able to fund many of these local projects yet we don’t have a system in place to support the legislature in really being strategic in using what dollars are available to fully fund projects that have other sources available or to sort of collectively prioritize the state’s most urgent needs when it comes to local projects.”
Lawmakers on the Revenue Stabilization and Tax Policy Committee were for the most part receptive to the suggestion this week.
But some say they are worried larger communities that have more personnel to put together such proposals to present to the state might have an advantage over rural and tribal areas where such resources are limited.