New Mexico hopes to use federal money to shore up unemployment insurance fund
Mar. 25—Since September, New Mexico has relied mostly on federal loans to keep its unemployment insurance fund solvent.
As of Friday, with more than 100,000 New Mexicans receiving unemployment benefits, that amounted to nearly $235 million in state debt.
State lawmakers, hopeful that federal American Rescue Plan Act money will help, appropriated $600 million of those promised dollars into the fund for the 2022 fiscal year budget.
But it's unclear just how the state can use those dollars, Workforce Solutions Secretary Bill McCamley said.
"The goal is to have as much money as we can in that fund on July 1," McCamley said Wednesday. "But until we get more definitive direction from U.S. Treasury Department, we can't make that decision."
New Mexico is expected to receive $1.6 billion in federal coronavirus relief money under the rescue plan, with more than $1 billion of that amount committed to specific programs — including the troubled unemployment insurance fund.
A little more than a year ago, the fund was around $450 million strong, with fewer than 10,000 people statewide drawing unemployment benefits.
Then the coronavirus pandemic hit the state, and those unemployment numbers topped the 150,000 mark by summer.
The wave of payouts resulting from massive layoffs depleted the fund by September.
"No one saw almost half a billion dollars going away in a six-month period," McCamley said. "The pandemic has created a situation that happens once in a century, and we're all working as hard as we can to develop strategies."
As of Friday, more than 108,000 New Mexicans remained on unemployment.
"That fund makes sure people can get their benefits," McCamley said. "And right now that is our priority. People rely on those payments to put food on the table, pay rent every month."
McCamley said he will not speculate on how the state should spend the $600 million — paying off the federal loan, shoring up the fund or a little bit of both — until he receives some guidance to do so.
He added he hopes those guidelines are flexible, as they were when the state received federal aid with unemployment benefits late last year and early this year. As a result, he said, for "a six-week period we didn't have to borrow from the feds."
He said any decision ultimately would be based on conversations and cooperation with other state agencies, including Gov. Michelle Lujan Grisham's office.
Governor's Office spokeswoman Nora Meyers Sackett wrote in an email Wednesday the state is "awaiting additional federal guidance on the use of relief funds" before creating a plan.
McCamley said he has "no idea" when the Treasury Department will issue some directives regarding the federal money.
