New Mexico’s oil boom could mean big bucks for statewide road projects.
Both Gov. Michelle Lujan Grisham and a key legislative committee have proposed using a hefty chunk of the state’s current budget surplus – $300 million to $400 million – on improvements to an aging, and in places overwhelmed, state road system.
“We’re not going to get this kind of circumstance every year,” said Sen. Carlos Cisneros, D-Questa, sponsor of an annual infrastructure bill that will ultimately include the road funding. “This is a one-time opportunity we have to take advantage of.”
It would ultimately be up to the state Department of Transportation to decide which projects receive funding, Cisneros said.
Although no decisions have been made yet, the agency has already identified some possible projects, including reconstructing a heavily trafficked oil field route in Eddy County and building a new Interstate 25 interchange near Los Lunas.
Adding a third traffic lane on Interstate 25 between Bernalillo and Santa Fe could also be an option, according to DOT and Legislative Finance Committee files.
Michael Sandoval, Lujan Grisham’s pick to lead the Department of Transportation, said projects would be selected in large part based on their potential to create economic growth.
“Everything is on the table right now,” Sandoval told the Journal. “We just need to be really smart and strategic about choosing the projects.”
He said there will most likely be no regional formula for choosing road projects, and said the agency would seek to keep politics out of its decision-making.
However, some lawmakers are already advocating for road funding in a state that has more than $1 billion in identified road repair needs, according to the DOT.
Rep. Cathrynn Brown, R-Carlsbad, said much of the available budget surplus should go toward roadwork in southeastern New Mexico, where the state’s oil boom is concentrated.
“People are upset that the state hasn’t put more money into the region,” Brown said in an interview. “There needs to be some reinvestment.”
She said increased vehicle traffic on area roads – including numerous trucks hauling oil field equipment – regularly leads to traffic delays and has created public safety problems.
For instance, she said, there’s little or no space for law enforcement officers to safely pull vehicles over on N.M. 31 near Carlsbad.
“The problem is more severe than it’s ever been,” Brown said. “Our future revenues depend on a sound infrastructure.”
Temporary help
Using money from the state’s unprecedented revenue windfall would mark a new – if temporary – approach to funding road projects.
The state typically finances such projects either by issuing bonds or from a state road fund that gets its money from a gasoline tax, along with other taxes and fees. New Mexico also receives federal dollars for highway construction projects.
However, the state has struggled to keep up with maintenance on more than 30,000 miles of roadways in recent years, in part because more fuel-efficient vehicles have led to lower tax collections.
“We recognize there are a multitude of roads in dire need,” Cisneros said.
Due primarily to a steady increase in oil production levels, New Mexico is on track to end the current budget year in June with a more than $1.2 billion budget surplus.
The LFC has proposed using roughly $400 million of that amount for statewide road projects, while Lujan Grisham has recommended $300 million for such projects.
Even such a large one-time cash infusion might not address all the state’s road repair needs, however, as the average cost of paving construction in New Mexico is $2 million per mile, according to the Lujan Grisham administration.
Gasoline tax
A former Motor Vehicle Division director and longtime DOT employee, Sandoval said a big down payment from this year’s budget surplus would not be a fix-all for New Mexico’s roads.
He specifically mentioned the infrastructure situation in Eddy and Lea counties, but said roads statewide will require future maintenance.
“We understand that everywhere in the state has needs, both urban areas and rural areas,” he said.
For that reason, lawmakers are considering increasing the state’s gasoline tax of 17 cents per gallon to address future road repair needs. The Lujan Grisham administration has not said whether it would support such a tax increase.
But a big, immediate expenditure on road projects would make a dent in the state’s current highway repair backlog while also bolstering the state’s construction industry, Cisneros said.
“It will infuse a lot of money into the local economy,” he said.
Meanwhile, because no bonds would have to be issued, construction could begin shortly after the governor were to sign off on a bill including the road projects – possibly by as soon as this summer.
By: Dan Boyd (ABQ Journal)
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