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F I S C A L I M P A C T R E P O R T
SPONSOR Silva
DATE TYPED 2/10/05
HB 4/aHTC
SHORT TITLE Department of Transportation Appropriation Act
SB
ANALYST Moser
APPROPRIATION
Appropriation Contained Estimated Additional Impact Recurring
or Non-Rec
Fund
Affected
FY05
FY06
FY05
FY06
723,758.9
Recurring
State Road Fund,
Local Gvt. RF, Avia-
tion, Transportation,
and Federal
(Parenthesis ( ) Indicate Expenditure Decreases)
Duplicates appropriation in the General Appropriation Act, Section 4 for the NMDOT
Duplicates/Conflicts with/Companion to/Relates to * HB2, HB7, SB190
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
$315,491.7
Recurring
Federal
$408,267.2
Recurring
Other State Fund
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates/Conflicts with/Companion to/Relates to *
All GENERAL APPROPRIATIONS ACTS: HB 7 & HB 2
SOURCES OF INFORMATION
-
Report of the Legislative Finance Committee to the Forty-seventh Legislature, First Session,
January 2005 for Fiscal Year 2005 – 2006, Volume II, pp. 306 - 310.
-
Road Fund Outlook, January 2005, NM Department of Transportation
pg_0002
House Bill 4/aHTC -- Page 2
Responses Received From
NM Department of Transportation (NMDOT)
SUMMARY
Synopsis of Bill
Amended House Bill 4 is the HTC approved appropriation bill that funds the New Mexico De-
partment of Transportation (NMDOT). The bill appropriates $723,758.9 to NMDOT for FY06
among three (3) programs and four (4) budget categories. The reduction from the original re-
quest of $730,428.2 is due to the fact that the State Infrastructure Bank revenue of $6,669.3 in-
cluded in the FY06 Budget request was budgeted in December FY05 through an approved BAR,
and therefore has been reduced from the Agency budget for FY06.
Significant Issues
Revenue increases to the State Road Fund for FY06 are $13,520.0 million higher than the FY05
Appropriation. The Agency request, Executive recommendation, LFC recommendation and
House Transportation Committee recommendation (amended HB4) take this revenue increase
into account. The Executive recommendation moves $6,775.8 million of state and federal funds
for FY06 IT projects out of the base budget. The Amendment recognizes this amount within the
departments proposed operating budget.
The department revises revenue estimates in August of each year for purposes of budget prepara-
tion, and again in December or January of each year for purposes of legislative deliberations.
The revenue estimates presented here have been reviewed and agreed to by members of the
state’s Consensus Revenue Forecasting group. The following is the revenue estimate of the
NMDOT.
Table 1 shows the estimated and actual state revenues for FY04, and the January 2005 forecast
of state revenues for Fiscal Year 2005 and Fiscal Year 2006. The fiscal year “Growth Amount”
amounts reflect year-over-year growth, with the FY06 “growth” being growth over the FY05
Budget Estimate. The column marked "Estimate Revision" for the current fiscal year (FY05)
refers to the changes between the “Budget Estimate” used during the 2004 Legislative Session
and the latest revised estimate.
In addition to the (State) Road Fund, the department projects state-sourced revenues for the
Highway Infrastructure Fund, the Local Governments Road Fund, the Aviation Fund, and the
Transportation Program Fund.
pg_0003
House Bill 4/aHTC -- Page 3
Table 1
FY05 and FY06 Revenue Estimates
(Dollars in Thousands)
FY04 FY05 FY05 FY05 FY05 FY06 FY06
FY04 FY04 Growth Budget Jan-05 Estimate Growth Jan-05 Growth
Road Fund:
Estimate Actual Amount Estimate Estimate Revision Amount Estimate Amount
Unrestricted Revenues
Ordinary Income:
Gasoline Tax
110,489
112,107
1,642
111,523 112,583
1,060 476
116,802
5,279
Special Fuel Tax
71,473
74,546
5,069
88,043 91,100
3,057 16,554
93,500
5,457
Weight/Distance
52,000
51,574
180
74,796 73,430
-1,366 21,856
77,720
2,924
Trip Tax
4,000
4,050
-298
4,000 4,000
0 -50
4,000
0
Vehicle Registration
54,127
52,996
9,003
68,283 65,027
-3,256 12,031
67,315
-968
Vehicle Transaction
1,150
1,132
16
1,130 1,143
13 11
1,155
25
Driver's License
3,700
4,238
-304
3,756 4,270
514 32
4,300
544
Oversize/Overweight
1,200
1,157
17
4,000 4,000
0 2,843
4,000
0
Public Regulatory Commission Fees
3,400
3,298
-93
3,400 3,200
-200 -98
3,300
-100
Penalty Assessments (Reinstatement Fees)
1,150
1,085
-53
1,150 1,100
-50 15
1,100
-50
MVD Miscellaneous
1,000
923
-74
1,000 950
-50 27
1,000
0
Subtotal Ordinary Income 303,690 307,107 15,106 361,081 360,803 -278 53,696 374,192 13,111
Extraordinary Income:
Asset Sales
1,000
1,000
220
1,000 1,000
0 0
1,000
0
Equipment Buy-back Program
259
259
257
257 -2
539
539
“Logo” Signage Revenue
0
0
700
700 700
700
700
Other Revenue
2,500
2,500
-3,019
2,500 1000
-1,500 -1,500
1,000
-1,500
Road Fund Interest
483
395
-114
652 779
127 384
1,322
670
Subtotal Extraordinary Income 3,983 4,154 -2,654 4,152 3,736 -416 -418 4,561 409
Total Road Fund (Unrestricted Revenues) 307,673 311,261 12,452 365,233 364,539 -694 53,278 378,753 13,520
Other Funds:
Highway Infrastructure Fund:
Leased Vehicle Gross Receipts
4,700
4,536
71
4,850 4,700
-150 164
4,960
110
Tire Recycling Fees
1,850
1,421
-258
1,860 1,860
0 439
1,900
40
Interest
82
64
-51
111 125
14 61
213
102
Total Highway Infrastructure Fund 6,632 6,021 -238 6,821 6,685 -136 664 7,073 252
State Infrastructure Bank
198
181
-27
267 294
27 113 214 -53
Local Government Road Fund:
From Interest
156
179
14
211 352
141 173
598
387
From Special Fuel
8,894
9,268
627
9,230 9,551
321 283
9,804
574
From PPL Fee
6,442
6,615
247
6,567 6,845
278 230
7,076
509
From DWI reinstatement fees & ID cards
1,100
1,123
23
1,100 1,100
0 -23
1,100
0
From Gasoline Tax (MAP)
2,086
2,133
47
2,106 2,207
101 74
2,290
184
Leased Vehicle Gross Receipts
1,568
1,512
24
1,617 1,557
-60 45
1,653
36
Total Local Government Road Fund Income 20,246 20,829 982 20,831 21,612 781 783 22,521 1,690
Aviation Fund:
Gas Taxes (Aviation)
377
385
9
380 398
18 13
413
33
Aviation Jet Fuel
770
1,425
1,019
575 1,228
653 -197
1,095
520
Aircraft License Fees
70
76
6
70 77
7 1
80
10
0.046% of General Fund GRT (Aviation)
646
641
40
676 676
0 35
706
30
Total Aviation Fund Income 1,863 2,527 1,074 1,701 2,379 678 -148 2,294 593
Transportation Fund:
Motorcycle Registration (Fund 8)
64
72
9
65 72
7 0
73
8
Motorcycle Training Fund Interest (Fund 8)
2
2
0
33
0 1
5
2
Driver Improvement Fees (Fund 9)
183
154
-26
183 160
-23 6
160
-23
DWI Prevention (Fund 10)
87
130
81
48 130
82 0
130
82
Traffic Safety Fees (Fund 5)
928
845
-60
921 900
-21 55
900
-21
pg_0004
House Bill 4/aHTC -- Page 4
FY04 FY05 FY05 FY05 FY05 FY06 FY06
FY04 FY04 Growth Budget Jan-05 Estimate Growth Jan-05 Growth
Road Fund:
Estimate Actual Amount Estimate Estimate Revision Amount Estimate Amount
Traffic Safety Fees Interest (Fund 5)
15
18
2
20 35
15 17
60
40
Community DWI Prevention Fee (Fund 5)
750
721
-22
750 750
0 29
750
0
Total Transportation Fund Income
2,029
1,941
-16 1,990 2,050 60 109 2,078 88
TOTAL STATE REVENUES 338,641 342,760 14,227 396,843 397,559 716 54,799 412,933 16,090
Road Fund
Included in the Road Fund are unrestricted and restricted revenues. Restricted revenues are for a
special purpose; they are typically earmarked funds for special purposes (like the Aviation
Fund), or bond proceeds and the interest accruing from the proceeds. Unrestricted revenues sup-
port the bulk of the activities associated with the state highway system and, therefore, receive the
most scrutiny during the budget and appropriation process.
One particularly relevant figure to note for Road Fund income is the annual change in unre-
stricted revenues. The “Growth Amount” for FY05 is forecast at $53.7 million, and FY06 is
forecast at $13.1 million. This level of growth in FY05 reflects the revenue enhancements asso-
ciated with HB-15 (2003 Special Session) and SB-114 (2004 Regular Session) rather than any
unusually strong economic indicators.
Gasoline Taxes – Gasoline Tax revenue for FY04 was stronger than forecast, primarily as a re-
sult of implementation of the Nambe Pueblo “gasoline tax sharing agreement” in the latter half
of the year, and gradually improving economic conditions. The large revision to the forecast for
FY05 reflects changes in two offsetting factors: 1) implementation of the Santo Domingo
Pueblo “gasoline tax sharing agreement” (2004 legislation – SB-114) and the full year impact of
the Nambe Pueblo agreement; and, 2) a weaker demand for gasoline associated with increased
retail prices. For FY06, a gradually improving economy and more stable gasoline prices, along
with a more stabilized pattern of Native American gasoline sales should result in fairly strong
growth in the gasoline tax revenue.
Motor Carrier Taxes – In FY04, Special Fuels Tax again showed surprising strength, exhibiting
a growth rate of +7.2% on top of the prior year +5.8% growth. Weight-Distance Tax, however,
continued its level trend with growth of +0.4% on top of last year’s +1% increase. As expected,
recent trends in motor carrier revenues have strengthened somewhat, following the weakness in
FY02 and FY01. FY02 saw about a -2% decline in Special Fuels Tax and no growth in Weight-
Distance Tax, following significant declines in both these revenue sources in FY01. The decline
in Weight-Distance Tax in FY01 was attributable to the outright loss of the Annual Filing Fee
(cab card fee) as a result of the C.R. England Trucking lawsuit.
Recent declines in Trip Tax appear to have finally stabilized, with the tax bottoming-out at about
the $4 million per year level. The four-year pattern of decline was associated with the C.R. Eng-
land lawsuit, and the Tax Department’s response of issuing free cab cards that could legitimately
be xerox copied. Truckers with cab cards (aka: tax qualification cards or tax identification per-
mits) are not subject to the higher tax rate associated with the Trip Tax, but instead are supposed
to file Special Fuels and Weight-Distance tax returns. The Trip Tax declined from a level of $9.7
million in FY99 and FY00 to a mere $4.05 million in FY04.
pg_0005
House Bill 4/aHTC -- Page 5
One of the provisions of HB-15 (2003 Special Session) is to require vehicle-specific weight dis-
tance tax identification permits that are expected to enhance Trip Tax collections, and eventually
enhance weight distance tax compliance. No amount of revenue attributable to enhanced com-
pliance has been included in this revenue estimate, due to uncertainty regarding the ultimate ef-
fects of the vehicle-specific tax identification permit.
Motor Vehicle Division Fees - Motor Vehicle Registration Fees were about $9 million above the
prior year in FY04, yet came in about $1 million below estimate. The significant increases in
projected revenues in FY04 and FY05 were the result of the revenue enhancements provided in
HB-15 (2003 Special Session) that became effective on March 1, 2004. Presumably the reason
FY04 revenue fell slightly short of the estimate is that a number of vehicle owners, faced with an
unexpected increase in their registration fees, may have chosen to forego the two-year registra-
tion option. There has been some anecdotal evidence to that effect, and this may tend to bolster
FY05 revenue since FY05 was expected to be a weaker year in the recent two-year up-and-down
cycle.
Driver License Fees were expected to decline dramatically in FY04 as we entered the fifth year
of the program allowing an 8-year driver license option. Over the prior four years, Driver Li-
cense Fee revenue had been approximately 25% to 30% higher than it had been historically, as a
result of the doubled fee associated with 8-year licensing periods. FY04 revenue came in about
$538 thousand stronger than expected, so the impact of this “fifth-year” affect was only about
one-third to one-half of the expected negative impact.
Interest Earnings – The estimates for interest earnings on fund balances have been raised signifi-
cantly to reflect a forecast of gradually increasing interest rates during FY05 and FY06.
Risks to the Forecast – A request for a class action presumably is continuing in State District
Court (U.S. XPRESS v. New Mexico), requesting refunds of the unconstitutional cab card fee be
paid to all commercial carriers who had paid the fee. The case was dismissed without prejudice,
and then re-filed by the plaintiff. At risk is the immediate payment of two or three years worth
of refunds amounting to about $3.3 million to $3.5 million per year (i.e., $7 million to $10 mil-
lion total). It is assumed that in the absence of a class action lawsuit, most commercial carriers
would not bother to file for the $5 per year refund, so revenue losses would otherwise be negligi-
ble.
The prior law cab card fee was challenged in the C.R. England Trucking lawsuit in 2000, and the
Taxation & Revenue Department agreed to cease collecting the fees associated with the cards
beginning in calendar year 2001. HB-15 (2003 Special Session) repealed the old law, and re-
quires a new vehicle-specific weight distance tax identification permit for which an appropriate
administrative fee may be charged by TRD (the fee has been set at $2 per card). It is believed
the new law would withstand a challenge on constitutional grounds since it is strictly an adminis-
trative fee rather than a non-apportioned tax, but the industry has threatened to challenge the new
law. Industry’s main concern may actually be the logistics of dispersing vehicle-specific cab
cards to their vehicles.
Aviation Fund – Surprising strength in FY05 revenue from aviation jet fuel is the result of higher
fuel prices, and considerable adjustments to estimates of the recurring tax base as a result of tax-
payer reporting problems. A large taxpayer failed to consistently report tax during FY03 and got
caught-up early in FY04. While it has been difficult to attribute FY04 revenue back to the
pg_0006
House Bill 4/aHTC -- Page 6
proper time frame, it does appear that the increase in the jet fuel deduction passed during the
2003 Legislative Session has had a considerable positive impact on the volumes of jet fuel sold
in the state. The FY06 forecast includes the expectation of continued high volumes but a decline
in fuel prices.
Traffic Safety Fees – In recent months there was a surprising strength in revenue from certain
limited driver license fees dedicated to the DWI Prevention and Education Programs in the pub-
lic schools. It is assumed the revenue strength is associated with applications for the new “igni-
tion interlock license”, although Motor Vehicle Division personnel are unable to confirm that
hypothesis. The increased revenue in FY04 appears to be more than a few month phenomenon
associated with older DWI license revocations.
Highway Infrastructure Fund – A disturbing trend in Tire Recycling Fees was discovered in the
spring of 2004, and it was subsequently discovered that, after increasing the fee in July 2003 as a
result of 2003 Session HB-25, the distributed revenue amount inexplicably reverted to its prior
level during the months of January through June 2004. Upon finding the error, the Motor Vehi-
cle Division corrected the distributed revenue amounts with a one-time distribution adjustment in
October 2004. The forecast for the Highway Infrastructure Fund shows the normal monthly lev-
els of fee disbursements for FY05, as if the one-time adjustment had been booked back to FY04
(adjusting the FY04 closing fund balances).
SAFETEA Funds Outlook. The federal transportation bill establishes the level of federal fund-
ing for New Mexico for a six year period. In 2004, Congress was expected to, but did not, reau-
thorize the Transportation Equity Act for the 21
st
Century (TEA-21). The latest extension of
TEA-21 through March 2005 continues federal surfacing programs at funding levels equivalent
to the previous fiscal year. At the center of the debate are issues regarding the overall size of the
program over the next five years, the source of funds, and the relative “rate of return” to states
that pay larger and smaller shares of motor fuel taxes. Programmatically all the bills emphasize
safety programs, environmental streamlining, and a new infrastructure performance and mainte-
nance program, which targets quick projects to address highway condition and congestion.
Neither house of Congress has identified any new revenue sources to fund the incremental
growth of the program. The administration and the house leadership are opposed to any increase
in fuel taxes, and no other funding mechanism to provide a sufficient increase has been indi-
cated. It appears that funding formulas for distribution of funds among the states would remain
approximately the same as in TEA-21. Each year, based on the federal formulae, $167 million of
federal funds are allocated to New Mexico to fund the statewide transportation improvement
plan (STIP), called “road betterments.” Based upon the formulae the department projects flat
funding for this activity from the six-year reauthorization process. The remaining funds from this
distribution are used for bond payment activity as determined by Governor Richardson’s Invest-
ment Partnership (GRIP). As more federal funds become obligated, greater pressure is placed on
the state road fund for not only operating costs but also to augment construction expenditures, to
include principal and interest payments. This trend impacts upon legislative approval authority.
pg_0007
House Bill 4/aHTC -- Page 7
Overview of FHWA Funds Usage
(including portions of FHWA "Forest Service" Funds)
167 167 16 7 167 1 67 1 67 167 167 16 7 16 7 167 1 67 167 167 1 67 16 7 167
0
34
54 61 46 46
2 0 1 3
40 50 63 78 90
107 1 21 12 3 137
11
20 50
71
8 9 9 4
95
93
88
81
77
69
62 70
6 4
0
50
100
150
200
250
300
350
400
ST IP Pr og r am Mini mum ( 1 997 lev e ls ) O th er s pen ding on f e der a l- aid pr o jec t s ( Road B et te r men ts ) B ond Pay men ts ( pr inc ip al & int er e s t)
$1 66, 853, 00 0
19 97 ST IP Lev e l
MTD Tax Cards Reinstated.
Motor Vehicle Transportation (MTD) estimates the trucking industry
has been underreporting its taxable activity within the state by around $7 million per year.
Weight-distance tax permits and revenue were flat from 2000 to 2004 and port of entry revenue
decreased by 54 percent even though heavy commercial daily vehicle miles traveled through
New Mexico increased by 19 percent from 2000 to 2003. With weight-distance accounts up and
truck miles traveled up, the state should expect to see trip-tax revenues drop and weight-distance
tax increase. Also during this timeframe, the average number of “zero returns,” [weight-distance
tax accounts that reported no miles traveled within New Mexico,] was 13,000. Before the elimi-
nation of the tax ID card, the Taxation and Revenue Department (TRD) had fewer than 500
“zero returns” filed each quarter.
The NM tax identification permits, suspended from December 2000 to July 2004 in response to a
legal challenge, are again being issued for individual commercial vehicles. Since July 2004,
TRD has issued 425,563 NM tax identification permits. Along with the reinstating of the NM
tax identification permits, a system is being created to capture information for auditing purposes.
MTD estimates weight distance tax revenue will increase by $1.8 million between 2004 and
2005 with the use of the NM tax identification permits.
Also, in Moving New Mexico Further Along, the administration highlighted increasing fines for
commercial vehicle violations. The committee supports the recommendation, which will posi-
tively impact the Taxation and Revenue Department with an increase in revenues estimated at
around $1 million.
GRIP Implementation and Project Planning. During the 2003 special session, the Legislature
increased transportation-related taxes and fees to support the state road fund and authorized
pg_0008
House Bill 4/aHTC -- Page 8
$1.585 billion of bonds issuance to fund 37 transportation projects, including a commuter rail in
the Interstate 25 corridor, over an eight-year period. Debt service for these bonds comes from
the increased revenues and the state’s existing dedicated federal and state transportation revenue
streams.
The implementation and coordination of the $1.586 billion GRIP program and the statewide
transportation improvement program (STIP) is the most significant management issue confront-
ing NMDOT. The department must leverage all available funds from GRIP bond proceeds, fed-
eral funds, and external partnerships to deliver all projects. All GRIP projects must be pro-
grammed in STIP. Prior to GRIP legislation several of the corridors included in GRIP were iden-
tified for some level of preservation in STIP (federal) funds. The programmed projects extend
from federal fiscal year 2004 to federal fiscal year 2009. These funds are not available until the
authorization is granted for each fiscal year. In total, it is estimated that $228.6 million, over the
six-year period, in federal funds “overlap” the GRIP funding. Based on current cost estimates,
the department concludes GRIP authorization is sufficient to complete all projects identified and
use of STIP funds to supplement the projects is not anticipated; however, given the current trend
of rising oil and steel pricing, use of STIP funds to supplement GRIP might be necessary.
Bond Program and Debt Management. The department has a total outstanding debt of $1.6
billion with an FY05 debt service obligation of $157 million for all NMDOT bonds. The GRIP
bonds account for $1.14 billion in outstanding principal with a final maturity date in 2024. Total
GRIP interest and bond expenses will total $720 million through maturity of the bonds. The an-
nual debt service for all bonds will be no more than $160 million. NMDOT is evaluating the
need for additional bonding to meet the needs of the state and anticipates completing such analy-
sis for the 2005 legislative session. The department through September 2004 has awarded nine
projects totaling $58.7 million and nine additional projects are scheduled to be awarded by the
end of 2004 for approximately $169.7 million.
Public Transportation Initiatives. In FY05, the department developed a strategic plan that in-
cluded as a key element the development of transportation alternatives such as commuter rail or
bus service.
Commuter Rail. GRIP legislation provided for reconstruction and improvement of the Interstate
25 (I-25) corridor from Belen to Santa Fe to accommodate public transportation elements includ-
ing commuter rail. Rail activity has been accelerated while I-25 improvement has not been given
the same priority. In a joint partnership between the department and the Mid-Region Council of
Governments (MRCOG), the department is approaching commuter rail in two phases: Belen to
Bernalillo, estimated completion in the fall 2005; Bernalillo to Santa Fe, estimated completion
date in 2008. No funds have been allocated under GRIP for the second phase.
The phase one fall 2005 deadline imposed by Governor Richardson significantly altered the
planning process. Minimal analysis of customer demand, fare structure, economic development,
and return on investment was conducted prior to capital investments in rail cars and locomotives.
These analyses are critical in the determination of operating revenue projections, subsidies
needed to cover the rail’s operating costs, the number of trains needed, locations of stations,
scheduling, and coordination with local transit systems for commuter transport to worksites.
Analysis is now being completed in these areas.
pg_0009
House Bill 4/aHTC -- Page 9
To meet the fall 2005 phase one operations deadline, priority was given to tasks requiring the
longest acquisition lead-time, including securing track access, the purchase of train locomotives
and cars, and acquiring land for stations. Purchase contracts have been signed for 10 bi-level
passenger rail cars ($21.9 million) and four locomotives ($9.6 million). The state of New Mexico
and Burlington Northern Santa Fe Railroad (BNSF) signed a memorandum of understanding
(MOU) outlining proposed terms to enable commuter service between Belen and Bernalillo. An
operating agreement is currently under negotiation with an estimated cost for track access and
improvements as being $30 million. Station costs are estimated at $10 million for nine stations.
Final costs are uncertain pending final land acquisition and station design
.
GRIP funds are being used for the phase one capital funding and the initial planning of phase
two. Phase two capital funding is being sought through the Federal Transit Administration
(FTA) “New Starts” program for major capital transit investments. This is a three-part process
subject to FTA evaluation and approval at each step. These are the completion and approval of a
detailed “alternatives analysis,” expected to be complete in nine months to a year, a “preliminary
engineering” analysis, expected to take one to two years, and “Final Design”, expected to take an
additional one to two years. The analyses required for phase two might show that a commuter
rail will not be the preferred transit and a bus or other transportation system will be a more feasi-
ble alternative. It is also possible that access to or purchase of the proposed tracks will result in a
prohibitively high cost, and the project will not be undertaken.
Phase one operations are planned to be subsidized in the first three years with congestion mitiga-
tion and air quality (CMAQ) federal funding. Subsequent year subsidies will be sought from po-
tential regional transportation district (RTD) revenue. RTDs are permitted under state law to im-
pose a one-half percent gross receipts tax on participating municipalities.
Self-Sustainability of Park and Ride Programs. NMDOT is engaged in a strategy that would get
the general public to use park and ride first, then by the commuter rail. NMDOT began park and
ride as a mechanism to meet a federal mandate to reduce the number of vehicles traveling
through the US84/285 construction zone corridor between Santa Fe, Espanola, and Los Alamos.
Service began in May 2003 and was expanded in December 2003 to include an I-25 route be-
tween Santa Fe and Albuquerque. Both ventures were fully funded by federal funds less passen-
ger revenue. Effective December 2004 federal funding will be reduced to 40 percent of net costs
for both routes. Generally the northern New Mexico routes are experiencing ridership of 17 per-
cent of capacity and the Albuquerque to Santa Fe buses are averaging 35 to 39 percent of capac-
ity. Increases in ridership have been noted in the Albuquerque-Santa Fe routes with declining
numbers in the Espanola-Santa Fe routes. The cost per passenger to NMDOT is more than
$20/day. This amount is four times the amount commuters currently pay to participate in van-
pools. Consideration is being given to opening a new park and ride service connection between
Las Vegas and Santa Fe and a reduction in existing less productive routes such as between Espa-
nola and Santa Fe. The department should continue to consider maximizing its expenditures at
routes where participation merits the investment and seek alternative measures for other routes.
Analysis should include a discussion of costs versus benefits, including the impact of reduced
traffic congestion. Additionally, all alternatives must be considered. Van pools for certain mar-
kets might be more practical and affordable to address commuters’ needs than park and ride
buses.
pg_0010
House Bill 4/aHTC -- Page 10
PERFORMANCE IMPLICATIONS
Two changes were made in the amendment to performance measures. The first being to number
of traffic fatalities to reflect a target of 1.85 per one hundred million miles traveled. This is a goal
that is consistent with trend data over the past seven years. The second target changed was that of
a 2.5% vacancy rate. This was increased to 5% to reflect a more realistic goal.
FISCAL IMPLICATIONS
Revenue increases to the State Road Fund for FY06 are $13,520.0 million higher than the FY05
Appropriation. The Agency request, Executive recommendation, LFC recommendation and
House Transportation Committee recommendation (amended HB4) take this revenue increase
into account. The recommendation includes $6,775.8 million of state and federal funds for FY06
IT projects in the base budget.
The appropriation of $723,758.9 contained in this bill is a recurring expense to the State Road
Fund, Local Government Road fund, the aviation and transportation funds and federal funds.
The bill appropriates $723,758.9 to NMDOT for FY06 and funds the department’s three (3) op-
erating programs among (4) budget categories. The bill reflects an amount of $7,894 State Road
Fund transfers the Department of Public Safety, Motor Transportation Division and also includes
the IT amount which was removed from the Executive Recommendation.
ADMINISTRATIVE IMPLICATIONS
The department cautions that any salary increases granted for next fiscal year by legislative ac-
tion will increase operational costs that will be borne by Road Fund revenue and that these in-
creased costs will be managed either through higher vacancy rates or through adjustments to the
highway construction program.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Duplication of HB7 and HB2.
TECHNICAL ISSUES
It needs to be determined if DFA is going to propose FY06 language in regards to the carry-over
or re-budgeting of prior year encumbrances. If not then language needs to be added to reflect this
change.
OTHER SUBSTANTIVE ISSUES
Infrastructure and Programs:
•
Amended HB4 increases the Contractual Services Category from the Agency Request by
$8,200.5. This increase is in the Road Betterments Division, 100% State Program for those
roads that do not qualify for federal funds. Another $6,469.3 has been committed to this
pg_0011
House Bill 4/aHTC -- Page 11
100% State Program for a total program of $14,669.8. This is an increase of 126.8% over
FY05.
Transportation & Highway Operations Program:
•
Amended HB4 reduced the Contractual Services Category by $234.2 from the Agency Re-
quest. The agency indicates that this may impact drug testing programs administered by the
department.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.
The New Mexico Department of Transportation will not receive appropriation for FY06.
AMENDMENTS
The following language should be added:
The other state funds appropriations to the construction program of the department of trans-
portation include fourteen million six hundred sixty-nine thousand eight hundred dollars
($14,669.8) for a state-funded construction program.
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