2016 Legislative Preview: Capital Outlay & Budget Outlook

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By Paula Garcia

The 2016 legislative session will start on Tuesday, January 19th and will continue for 30 days. For our state lawmakers, two of the primary goals of a 30-day session are to enact a budget for state government and to pass a Capital Outlay bill. Generally, legislation that has an impact on the state budget is considered "germane." Other legislation with a purpose of changing policy can only be heard by the legislature if the Governor issues an Executive Order with a message that specifically puts that bill on her "call." The NMAA will be primarily concerned with the budget and Capital Outlay package.
With regard to Capital Outlay, the outlook on the amount of funding available for local projects appears dim. Because of a decrease in severance tax bond revenues, there will be less Capital Outlay funding generally. If there is any funding available for local projects, it will likely be less than what was available last year. However, local governments will be making requests for funds through Capital Outlay requests. If an acequia plans to request Capital Outlay, the NMAA suggests using the following checklist:
  • The NMAA highly recommends that your acequia complete an Infrastructure Capital Improvement Plan (ICIP) and securing matching funding for your project before requesting Capital Outlay. ICIPs were completed in June 2015 for Fiscal Year 2017 and NMAA is already working with acequias for the June 2016 deadline.
  • If your acequia does not have an ICIP, NMAA highly recommends having a cost estimate. If your acequia has a competed design, you likely have a realistic cost estimate. If you have not completed a design or if your project does not require a design, your acequia should at least have a PRELIMINARY COST ESTIMATE (obtained from a contractor, NMACD, or NRCS) that you can use to estimate the cost of an engineering design. If that is the case, your acequia should apply for funds for the design phase first. In the following year, after the design is completed, your acequia can then apply for construction funds.
  • In accordance with Governor Martinez' Executive Order 2013-06, local governments must be compliant with the Audit Act and DFA financial reporting requirements in order to qualify for Capital Outlay. NMAA can guide you through the process of financial compliance.
  • The form for applying for Capital Outlay are located on the State Legislature website. http://www.nmlegis.gov/lcs/capital_outlay_request.aspx
  • The Capital Outlay form has to be completed by you and signed by your legislator by January 31, 2016 and submitted to the Legislative Counsel Service.
NMAA will be available to assist acequias with their capital outlay requests and will monitor the funding legislation during the session. In addition, the following are some of the budget matters of interest to the NMAA:
  • NMAA is supporting an effort to protect the long-term solvency of the Irrigation Works Construction Fund. The fund was created in 1955 for the purpose of making improvements to irrigation infrastructure. On an annual basis since the 1980s, some of the fund has been appropriated to the Interstate Stream Commission for their acequia cost-share program. This program has benefitted many acequias over several years and it continues to be a top budget priority for acequias statewide.
  • The principal of the Irrigation Works Construction Fund is nearly depleted because the fund was tapped in starting in 2009, during the time of budget shortfalls, to pay for agency operations. The Office of the State Engineer and the Interstate Stream Commission has requested that the legislature move away from using the IWCF for agency operations and to use General Funds instead. There are several legislators who support this effort but also acknowledge that it is difficult to allocate money from the General Fund given all the other demands in the budget process. The NMAA will be monitoring this budget issue during the session and in future legislative sessions to advocate for continued acequia funding and secure funding for the OSE an ISC.
  • Other line items of interest to acequias include the Acequia and Community Ditch Fund (NMSU) which is administered by the New Mexico Department of Agriculture to assist acequias with adjudication expenses and the Acequia and Community Ditch Education Program, which is administered by DFA and is used to provide educational services and technical assistance to acequias statewide (under contract with the NMAA). These two are vitally important to acequias in New Mexico and NMAA will monitor them in the hope that they remain at their current funding levels.
  • Lastly, the New Mexico Acequia Commission is requesting an increase in their budget. The Commission is the Governor-appointed entity in DFA Local Government Division that is intended to serve as an advisory body to the state legislature, agencies, and the Governor. NMAA supports an increase in funding for the Commission to fulfill their statutory purpose.