On Tuesday, November 24, after seven hours of debate and discussion, New Mexico lawmakers passed a bipartisan coronavirus relief bill that will provide a onetime $1,200 check to all types of unemployed workers and up to $50,000 for certain businesses. Governor Michelle Lujan Grisham called for the one-day special session as the state is confronting spiking infection and death rates. House Bill 1 easily passed both chambers. It passed in the House on a 50-11 vote and passed the Senate on a 33-5 vote.
The total approved expenditure is $330 million. A total of $319 million is unspent funds the federal Coronavirus Aid, Relief, and Economic Security Act (CARES) relief funding previously assigned to New Mexico. The money must be used by the end of the year or it reverts back to the federal government. An additional $10 million in state general funds were allocated for Covid 19 testing and tracing efforts.
The bill allocates $100 million to support businesses with 100 or fewer employees. The New Mexico Finance Authority will be distributing the grants, which can be up to $50,000. Businesses in the hospitality and leisure industry, which are the businesses severely harmed financially by New Mexico’s public health orders, would get priority. The Finance Authority has wide discretion about who will be chosen. The Finance Authority is instructed to focus on the service industry. The bill instructs the Finance Authority to make sure recipients are spread out geographically and that it not be concentrated in the tourism and Democrat-heavy cities of northern New Mexico.
Marquita Russell, CEO of the New Mexico Finance Authority, said businesses can apply online for the money, which would then be distributed in phases. According to Russell:
“We don’t want to make 100% of it available on Day One, because that disadvantages some businesses.”
The enacted legislation provides smaller stimulus checks to immigrants without legal status in the country and dependents, as well as additional funds for food banks, virus testing and contact tracing efforts. Also included the enacted legislation is spending to help food banks and people struggling to pay their rent or mortgage.
BREAKDOWN OF RELEIF FUNDING
On Wednesday, November 25, Governor Mitchel Lujan Grisham signed into the law the House appropriation bill. Governor Lujan Grisham had said the day before it was critical to get “economic relief to New Mexicans who are hurting and not able to go to work.”
The distribution of federal funding includes:
$194 million to pay for the one-time $1,200 checks to unemployed workers. About 160,000 people could get the money, but it isn’t clear what would happen if the number of claims exceeds the $194 million appropriated by lawmakers, according to legislative analysts.
$100 million for a new grant program targeting small, local businesses and nonprofit groups. It will authorize grants of up to $50,000, with help for the hospitality and leisure industry a priority. To qualify, the business must have 100 employees or fewer, and about 4,000 companies are expected to get grants.
$15 million to help homeless people and New Mexicans struggling to pay their rent or mortgage.
$5 million to provide checks of up to $750 to low-income households who — because of immigration status or some other factor — didn’t receive a federal stimulus check this year.
$5 million to food banks throughout the state.
$10 million from the state general fund to help distribute COVID-19 vaccines when they’re available and cover increased costs in the court system for protective equipment and similar expenses.
In October, New Mexico’s unemployment rate was 8.1% above the national rate of 6.9%. In September, New Mexico depleted its unemployment insurance fund and began borrowing money from the federal government to fulfill claims.
According to the Department of Workforce Solutions, New Mexico has 130,000 people on the unemployment rolls. There is a high unemployment rate in New Mexico oil fields as the global demand for oil has bottomed out and oil fields are shut down. Further the pandemic closures has hit the state’s restaurant and tourism industry.
The onetime only $1,200 relief checks will go at least to 1,515 people who have exhausted all of their state and federal unemployment benefits. The relief checks comprised the largest portion of the relief act funding at $194 million. According to Workforce Solutions, payments will start going out to those eligible by mid-December using a similar framework the state used previously to distribute stopgap funding from the Federal Emergency Management Administration. New Mexico already owes the federal government $124 million. The amount is expected to spike to an alarming $400-500 million by the summer of 2021.
An additional $5 million will be distributed in the form of a $750 payment to residents who were ineligible for the federal stimulus sent to most American citizens and permanent residents earlier this year. Those eligible include dependents like children and the elderly as well as immigrants in the country without legal permission.
Bill Mc Camley, the Governor’s cabinet Secretary of the Department of Workforce Solutions, said in an interview with Channel 13 that he gets constant phone calls, emails and pleas on social media from people and had this to say:
“I hear all the stories, all the stories about how am I going to take care of my kids? How am I gonna afford my rent? How am I gonna afford my truck payment?”
Democrat State Senator Candace Gould had this to say regarding the unemployment assistance relief:
“Essential workers that are on the front lines. We want to keep them working and not going into the unemployment lines. … It’s imperative that we keep them out there, providing the services that are essential. So, this is a way to reward them and tell them that they matter too. We hear them and see them and that we’re going to give them a little help as well.”
HOUSE REPUBLICAN OPPOSITION NOTED
House Republicans were split on the bill. During debate, Republicans repeatedly slammed Governor Lujan Grisham’s public health orders and restrictions on in-person business activity. However, some Republican lawmakers supported the final bill saying the economic aid was necessary.
House Minority Leader James Townsend, R-Artesia had this to say:
“We are trying to reach out and help many families across New Mexico that are hurting and hurting for a variety of reasons. … They’re hurting because of the effects of COVID and hurting because of measures the state has taken in addressing COVID.”
COMMENTARY AND ANALYSIS
The second Special Legislative Session of the year was better late than never in that under the CARES Act $319 million would have reverted back the Federal Government had the legislature not acted by December 31 to spend it. Why it took so long no doubt is because Governor Michelle Lujan Grisham felt the need to wait until after the election given the increasing criticism of her handling of the pandemic and Republican opposition.
When the New Mexico regular 60-day legislative session begins on January 19, 2021, the state’s finances will continue to be in shambles as the State continues to deal with the spiking of covid cases, dealing with the dramatic decline in oil and gas royalty revenues and the declining gross receipts tax revenues from business closures. Now that the Presidential election is over, its more likely than not another federal CARES Act allocation will have to be made by congress.
With any luck, by the end of January, 2021 a vaccine will be available and this country’s second nightmare will begin to come to an end. We do know for sure that the first nightmare we have been experiencing for 4 years will come to an end on January 20, 2021 when President Joe Biden is sworn in as the 46 President of the United States.
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