LFC endorses bills ahead of session, including child welfare reform proposal

Jan. 20—As lawmakers prepare for the start of a 60-day session Tuesday, the Legislative Finance Committee endorsed several measures Monday, including a bill that would change how the Cabinet secretary for the Children, Youth and Families Department is selected.

The proposal to establish a CYFD secretary nominating commission, which would recommend an appointment to the governor after vetting candidates, reflects a larger push to try to reform the state's troubled child welfare agency.

"Adding a vetting process, a formalized vetting process similar to what you set up with other agencies, [would] hopefully improve who we're appointing, ultimately," Legislative Finance Committee Director Charles Sallee told lawmakers.

"You've had a number of Cabinet secretaries [at CYFD] that have been appointed to this important agency through the years that have no background in this particular area, and ... that has caused real challenges for administering these important programs," he said.

Members of the committee endorsed a total of about a dozen bills for sponsorship.

Wildfire funds: One proposal would create two wildfire emergency funds to manage and respond to wildfires.

The first would be used for wildfire prevention, such as thinning. The second, a wildfire suppression fund, would be used to fight active wildfires.

"You have a recommendation to load that [wildfire preparedness] fund, contingent on this legislation, with a couple years' worth of funding," Sallee said.

Taxpayer data: The committee also agreed to sponsor a proposal to allow its staff to access certain taxpayer information to evaluate tax expenditures and how well they work.

"LFC is one of the few evaluation shops that has a limitation on our access to confidential information in the executive branch," Sallee said. "They're not authorized to redisclose it, but they are authorized to get that information and do analysis and report aggregate data back. This would, in a very narrow way, allow for that to be able to evaluate those tax expenditures, to see what kind of results you're getting."

LEDA reporting: Another proposal the committee endorsed would require standardized reporting from the Economic Development Department on the Local Economic Development Act and the Job Training Incentive Program. An annual report is published and shared with the committee's staff but is not statutorily required, Sallee wrote in a memo.

"Right now, this has been voluntary, kind of, I would say, hit or miss, depending on the administration," he told lawmakers. "This would codify the requirements fro those two programs to regularly report their accountability provisions to the committee."

Sen. George Muñoz, a Gallup Democrat who chairs the committee, said the bill is a must.

"They say they're out of LEDA money every year," he said. "Then right before the session, they only have $30 million and then right after the session, we might give them $20 million and then they go to $80 million and so there's no accountability."

Financial cleanup: The committee is backing a bill that would reduce the amount of time for agencies to revert money back to the general fund from 90 days to 60 days.

Liability claims: The committee endorsed two separate but related bills dealing with liability costs amid a dwindling public liability fund used to settle claims against state government.

The first would cap payments from lawsuits against the state.

"The limits would be [$500,000] for property damages, $1.05 million for general liability, and the limit defined in the New Mexico Civil Rights Act (currently over $2 million and increasing each year with inflation) for civil rights liability," according to Sallee's memo. "This legislation was a recommendation of a 2023 LFC evaluation of the state's risk funds."

Sallee noted liability insurance coverage for state agencies and the "significant fiscal challenges" the fund has been experiencing was a big topic of discussion during the interim.

"We had done an evaluation about how other states manage their liability funds and found that many of them cap those payments to go out for individuals that are suing the state," he said. "The recommendation would be to set new limits."

Muñoz said the settlements have gotten "out of control."

"We know this is going to be roughly a $300 million cost to the state if we don't start thinking about how to cap it," he said.

The related bill would require state agencies to investigate and report significant losses "to learn lessons from what happened in a certain situation so that they don't happen again," Sallee said, adding it would reduce the state's liability exposure.

Follow Daniel J. Chacón on Twitter @danieljchacon.