Copyright © 2020 Albuquerque Journal
SANTA FE – Gov. Michelle Lujan Grisham said Monday her administration will earmark $50 million in federal funds to set up a grant program for New Mexico small businesses hit hard by the coronavirus pandemic.
The business aid program is part of the governor’s plan to divvy up $178 million in federal funds under a COVID-19 stimulus bill approved earlier this year.
Lujan Grisham vetoed a legislative plan to distribute some of the funds after a special session last month, saying it was up to her administration, not lawmakers, to determine how federal funds are spent.
“This unprecedented public health and economic crisis has caused a tremendous strain on local governments and on small businesses across our state,” Lujan Grisham said in a statement.
Specifically, she said the grant money would be available to support restaurants, retailers, and other types of small businesses around the state.
Under her plan, local governments around the state will be able to apply for $150 million in grants, with $50 million of that amount intended for small business grants that would be administered by cities and counties.
Debbie Romero, the acting secretary of the state Department of Finance and Administration, said Monday the agency’s scoring criteria for determining grant awards is still being crafted, but will likely take into account regional coronavirus impacts.
“The people who were more affected should expect to see more of the funds,” Romero told the Journal.
She also said it’s important the money be allocated in short order, as the federal funds will only be available to cover pandemic-related expenditures through Dec. 30.
“We don’t want to make it such a complicated process that we can’t get the money out quickly,” Romero said.
Meanwhile, the grant program is New Mexico’s latest attempt to address the economic impact of the COVID-19 outbreak, which has caused hundreds of businesses to close and the state’s jobless rate to increase to 8.3%, as of last month.
Lawmakers also approved a bill during a special session last month to make low-interest loans to help small businesses and local governments. Money from the Severance Tax Permanent Fund would fund the loans – up to $400 million for businesses and $50 million for governments.
In addition, the State Investment Council in April approved a separate program that made $100 million from the permanent fund available for short-term loans for mid- to large-sized businesses.
Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce, called the move “the best news I’ve read in a long, long time.”
Cole said it’s particularly important that recipients won’t need to pay back the funds.
“There are so many small businesses that are hanging on by a thread right now, so money by way of grants versus a loan will go a long way to strengthen the thread,” she said.
Rob Black, president and CEO of the New Mexico Association of Commerce and Industry, agreed that the funding is good news for businesses, but said he’s concerned about what comes next: actually giving the money away.
“What I think is going to be a challenge is getting the money out quickly and equitably,” he said.
Black said local cities and counties will have to put forward applications to the state for funds, and will quickly decide how they want to prioritize what businesses they want to support and under what criteria.
“I think it’s yet to be determined how they’re going to make those decisions, and I’m worried that may take a while at the local level,” he said, adding that associations and chambers of commerce can help by taking on an educational role to make sure local government agencies and elected officials have accurate information about businesses in their communities.
In all, a solvency bill passed by the Legislature during last month’s special session relies on $750 million that New Mexico received under the federal CARES Act.
While top-ranking lawmakers say additional budget-balancing actions will likely be needed in January, the federal funds are being used – along with state cash reserves – to help the state absorb a projected $2 billion revenue decline for the budget year that began this month.