ALBUQUERQUE, N.M. (AP) The city of Albuquerque will have less ability to spend on construction projects, as estimates show that the city’s bonding capacity is expected to decrease.
The Albuquerque Journal reported that about $110 million in bonding capacity is expected to be available for projects that go on the 2013 ballot. That’s down from $164 million last year.
Officials attribute the lower figure to past decisions to siphon away capital money to help the operating budget, a lack of growth in property values and other economic assumptions.
Albuquerque Mayor Richard Berry said the estimate underscores the importance of one of his key initiatives that aims to rein in operating spending and use the money instead for capital investments.
“We’re going to starve ourselves as a city” if only $110 million to $125 million is available for capital projects every two years, he said.
Berry said the $110 million figure is a reasonable estimate. It makes sense to start with a lower figure and add to it if economic conditions improve, his administration said.
City Council member Dan Lewis, chairman of the committee that handles budget matters, said that even if the initial figure proves to be too conservative, the final bond package is sure to be smaller than last year’s.
Over the last decade or so, the city has switched more and more of its tax revenue away from the capital program and used it instead for basic operating expenses.
At the time, there was a fear the city was building too many big projects, such as museums and the like, that it couldn’t afford to operate.
In any case, the city could have afforded a bond program of about $210 million next year if it hadn’t moved so much of its property-taxing authority to operations, said Lou Hoffman, Albuquerque’s director of finance and administrative services.
Another significant factor in the low estimate is the lack of growth in property-tax values, he said.
“Growth basically stopped,” Hoffman said. “We don’t know when it will return.”
Bernalillo County Assessor Karen Montoya said the tax values simply reflect the market.
“Our numbers are based on economic conditions,” she said.
Berry, meanwhile, is pushing ahead with a new capital program. Berry and the city council have agreed to set aside $3 million in annual spending that could be used to issue up to $50 million in bonds for the reconstruction of Paseo del Norte and Interstate 25.
But that effort is intended to supplement the main bond program, not fill in for lost revenue.