State faces looming funding crunch to pay for road construction, repairs - Dan Boyd, Albuquerque Journal
A shift toward more fuel-efficient vehicles is posing big challenges to New Mexico’s future ability to keep up with road construction and repair projects statewide.
Despite a recent infusion of federal infrastructure funds, New Mexico faces a $471.6 million gap in funding for priority projects around the state, top state Department of Transportation officials told lawmakers during a recent interim committee hearing.
Already, the percentage of acceptable roads in New Mexico has decreased in recent years, from 75% in 2011 to 69% in 2023.
DOT Secretary Ricky Serna said the troubling trend is due largely to inflation — it now costs about $3 million for each mile of road construction — and lawmakers’ reluctance to adjust the state’s 17-cent per gallon gas tax. That gas tax rate is currently the fourth-lowest in the nation.
“We basically are holding firm, while other states are moving the needle to keep up with inflation,” Serna told members of the Transportation Infrastructure Revenue Subcommittee during a meeting in Silver City.
In some cases, the budget crunch is already forcing the Department of Transportation to seek creative funding sources to ensure federal grant funds are not lost, Serna told the Journal.
Specifically, he cited $125 million in state funds that must be obligated by mid-September to move forward with a border highway connector project in southern New Mexico linking the Santa Teresa Port of Entry to Sunland Park.
While lawmakers expressed concern about the projected trends, there appears to be a lack of agreement on how to best address the state’s brewing budget crunch for road work.
Sen. Antonio “Moe” Maestas, D-Albuquerque, said it’s been a “failure of government” not to gradually increase the gas tax rate over the past 30 years. While multiple bills have been filed on the topic, none have ultimately been signed into law.
But Maestas acknowledged it’s difficult politically to support tax hikes at a time that rising overall state revenues have led to lawmakers setting aside money in new trust funds for future use.
“Paying an extra 5 cents a gallon sucks, but paying $1,200 for four new tires sucks worse,” he said during the recent legislative hearing.
“Without roads, this state is nothing,” Maestas later added.
But Rep. Rebecca Dow, R-Truth or Consequences, pointed out New Mexico currently has more than $64 billion invested in various state permanent funds.
“It’s just really hard to think about taxing folks more,” Dow said.
State road fund revenues declining
New Mexico’s state road fund gets its money from several revenue sources, including the gas tax, vehicle registration fees and the vehicle excise tax levied on purchases.
The road fund, which is used to pay for repair and construction projects statewide, is projected to gradually increase to nearly $600 million in 2030. But its value is then projected to decrease by 13% by 2050.
In large part, that’s because of a projected increase in fuel efficiency — as measured in miles per gallon of gasoline — in new vehicles.
The trend is driving the road fund’s projected decline, as it’s expected to cost the state nearly $36 million from the 2024 budget year through 2030, according to DOT data.
“You’re paying less (in gas tax) because you’re at the pump less,” Serna explained during the recent legislative hearing.
The Department of Transportation sought to shore up its fiscal outlook during this year’s 60-day legislative session by pushing legislation that would have given the agency up to $1.5 billion in bonding authority, along with increased vehicle registration fees.
But that bill stalled in the Senate after passing the House without a single “no” vote, forcing supporters to regroup.
Serna said he expects similar legislation to be filed during the 30-day legislative session that starts in January, but said the delay could lead to an even larger budget gap for many planned transportation projects.
How road funding works
Unlike other state infrastructure projects, road construction and repair projects must be entirely funded before work can begin.
That means state transportation officials prefer stability and certainty over big revenue swings, Serna said.
In recent years, lawmakers have earmarked hefty one-time appropriations to help pay for road projects statewide, but those appropriations typically include a spending deadline, Serna said.
In addition, much of the funding New Mexico received under a federal infrastructure bill has been earmarked for specific uses, and not made available for discretionary spending, Serna said.
In other words, while the $2.1 billion in one-time appropriations the DOT received from 2019 to 2024 was happily put to use on road construction, wildlife corridors, rest areas and electric vehicle charging stations, it did not necessarily put the agency on better financial footing for future years.
And with some of those outside funding infusions now drying up, the state still has a long list of road repair and construction projects.
Rep. Cynthia Borrego, D-Albuquerque, was among the lawmakers to express concern over DOT data that shows New Mexico residents are currently paying about $2,000 per year in costs related to the state’s deteriorated roads, even after the federal spending infusion.
While the state might not yet be facing a crisis, “It’s not a pretty picture,” said Borrego.
By the #s: More than half of NM groceries, convenience stores at ‘high risk’ due to SNAP cuts - Patrick Lohmann, Source New Mexico
More than half of New Mexico’s nearly 1,700 retailers that accept food stamps are at “high risk” of losing business or closing due to recent cuts to the federal Supplemental Nutrition Assistance Program, according to a Source New Mexico review of an analysis by the Center for American Progress.
According to the latest figures from the United States Department of Agriculture, 1,687 retailers across the state accept SNAP. That includes 776 convenience stores, 101 grocery stores, 72 farmers markets and 91 supermarkets, along with other types of retailers.
Of them, 898 are at “high risk” of facing financial difficulties, including closure, according to the Center for American Progress analysis, due to the cuts contained in a recent federal spending bill.
The recently enacted “One Big Beautiful Bill Act,” also known as H.R.1, cut federal SNAP benefits, imposed work requirements and passed certain costs on to states. While the cuts have not yet gone into effect, New Mexico officials predict that the state’s 450,000 SNAP recipients will lose at least some benefits and 40,000 people will lose benefits entirely.
New Mexico has the highest percentage of SNAP recipients in the country.
U.S. Rep. Gabe Vasquez (D-N.M.) told Source New Mexico this week that the cuts to SNAP will have wide-ranging impacts on not just recipients, but also retailers and farmers, especially in rural areas. He said he knows of a couple of rural grocers that receive more than three-quarters of their income from customers who use SNAP.
Back in May, Center for American Progress researchers sought to quantify how many retailers might be in trouble if SNAP cuts went into effect. They determined that more than 27,000 retailers nationwide were at “high risk” of losing significant revenue.
The authors deemed a particular retailer “high risk” based on two factors: One, if it was in a county with SNAP participation rates in the top 10% of counties; and, two, whether the retailer was one of relatively few in that county.
The New Mexico Health Care Authority does not maintain its own list of retailers that heavily rely on SNAP, according to spokesperson Marina Pina. Her office also did not immediately respond to Source’s request for comment on the Center for American Progress’ methodology.
However, authority officials recently told lawmakers that they predict retailers across the state will lose $1.3 billion in revenue as a result of the cuts.
According to the center’s data, the “high-risk” retailers lie in 18 counties, mostly in rural areas. The most “high-risk” retailers (154) operate in Doña Ana County, with 125 in San Juan County and 83 in Lea County.
The “high risk” retailers include 445 convenience stores, 42 farmers markets and 51 grocery stores, along with 267 retailers classified as “other.”
See a map below of the “high risk” retailers across NM.
Casados, latest head of troubled New Mexico’s troubled children’s agency, announces retirement - Danielle Prokop, Source New Mexico
In an abrupt announcement Friday, New Mexico governor’s office announced the same-day retirement of Teresa Casados, the latest secretary of the state’s beleaguered Children Youth and Families Department.
Casados is the fifth secretary in the last six years to oversee New Mexico’s child welfare department – the third to be confirmed, while two others have been interim. CYFD has faced increased scrutiny from lawmakers and advocates, who say the department has failed to address housing of children in offices and issues of child maltreatment in custody that has lead to rising costs of settlements. New Mexico Attorney General Raúl Torrez in April announced an investigation into a 16-year old foster child’s suicide.
Casados was formally appointed to the position in January 2024, after serving as the interim secretary starting in May 2023, when retired state Supreme Court justice Barbara Vigil stepped down.
The governor’s announcement highlighted Casados’ “complete transformation of the agency,” noting she had launched a public transparency dashboard; conducted rapid hire events; and ended the practice of the agency using Social Security benefits belonging to children in care.
“I am deeply grateful for the opportunity I’ve had to work alongside families across New Mexico during my tenure at CYFD,” Casados said. “The dedicated employees at CYFD do their challenging and important work with compassion and heart, and I hope they are given every opportunity to show what they are capable of accomplishing in the months and years ahead. While there is always more work to do, I am confident that the foundation we have built will continue to serve New Mexico’s children and families well into the future.”
Casados previously served as deputy secretary of the Department of Workforce Solutions under former Governor Bill Richardson, and also worked in his office.
CYFD Deputy Director of Communications Jessica Preston declined Source NM’s request to speak with Casados.
The latest change in leadership at the agency also comes amid the creation of a new oversight agency.
Gov. Michelle Lujan Grisham thanked Casados for her work as a secretary and chief operating officer in the governor’s office prior to that, calling her a “trusted partner and valued leader,” in a statement.
“She stepped up to help manage our pandemic response and helped create the Early Childhood Education and Care Department. It’s fitting that she took on one of the toughest jobs in state government at CYFD in the last phase of her career in public service,” Lujan Grisham said. “I am forever grateful to Teresa for hard work and dedication to the people of New Mexico. I wish her all the best in her retirement.”
The governor has designated CYFD Deputy Secretary Valerie Sandoval to lead the department. The governor’s office did not immediately respond to a Source NM inquiry on when Casados gave notice of her retirement.
State Sen. Nicole Tobiassen (R-Albuquerque) told Source NM in a phone call Friday that Casados’ departure “was long overdue,” and called for Lujan Grisham to put finding a replacement secretary on the agenda for the Oct. 1 special session instead of appointing a successor.
“This is an emergency situation,” Tobiassen said. “We’re asking her to do the right thing and allow us to put together an immediately qualified commission that goes out and finds the replacement.”
Tobiassen said she was working to put forward legislation to remove the secretary’s position from the governor’s office and establish an independent hiring commission with experts who can “hire the best person, not just for child welfare, but budget-wise,” as well.
Several pieces of similar legislation introduced in the session earlier this year failed to make it to the governor’s desk.
Members of the new advisory committee working to pick candidates for the Office of the Child Advocate, a newly created position established by the Legislature this year, met on Friday afternoon, but did not address Casados’ departure.
After the meeting, Maralyn Beck, a longtime child advocate on the advisory committee, said she was “not excited about” Casados’ leaving the agency and echoed Tobiassen’s request that it come before the special session.
“There is no issue our state is facing that is more urgent than this,” Beck said about CYFD.
Rep. Michelle Paulene Abeyta (D-To’hajiilee, who chairs the search for the committee, said she had not heard about Casados’ retirement, telling Source NM: “That’s news to me.”
This is a breaking story and will be updated.