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State divvies up $100M in US aid

Copyright © 2020 Albuquerque Journal

SANTA FE – After waiting for months, New Mexico cities and counties hit hard by the coronavirus pandemic found out this week how much they will get from $100 million in federal relief funds distributed by Gov. Michelle Lujan Grisham’s administration.

While some cities and counties – including Santa Fe – got a hefty portion of the federal CARES Act funds they sought, other local governments were awarded less than half of what they had requested.

AJ Forte, director of the New Mexico Municipal League, said the final award amounts seemed to benefit cities that requested larger amounts.

He also said there was some uncertainty among municipalities about whether public safety expenditures, for instance, would be eligible for reimbursement with federal funds.

“It’s not the silver bullet, but it’s going to help,” Forte told the Journal, adding that cities around New Mexico are in different financial conditions.

Santa Fe has been among the state’s hardest-hit cities, as the pandemic has decimated the capital city’s tourism-driven economy.

Recent estimates suggest the city faced an $82 million budget deficit, as a decline in visitors and the cancellation of several high-profile arts markets led to a collapse in gross receipts tax revenue, the city’s main revenue source.

(Source: State Department Of Finance And Administration)

As a result, the $17.6 million in federal CARES Act funds received by the city of Santa Fe – the figure is about 70% of the roughly $25 million city officials had asked for – was by far the largest amount in the state. Santa Fe County also received a comparatively high amount, $10.5 million, the fourth-highest on the list.

Mayor Alan Webber said Tuesday that most of the money will go to community members seeking financial assistance but that some money will go toward offsetting additional costs related to the pandemic.

Webber said CARES Act funding is not going to resolve the city’s budgetary problems but will go to helping residents who are struggling financially.

“We’re still dealing with a significant budget shortfall that’s chronic,” he said.

Asked why he thought his city received the largest allocation, Webber said he thought the state government recognized Santa Fe for its proactive response to COVID-19, including a city requirement to wear masks.

“I think the governor’s team, in evaluating our performance and our request, rewarded that response,” he said.

In scoring the grant applications, the state Department of Finance and Administration used 10 criteria that included whether cities and counties complied with the state’s public health orders issued in response to the COVID-19 pandemic.

That prompted criticism from some Republican lawmakers, who accused Lujan Grisham of being vindictive and questioned her authority to include compliance with the public health orders as a criterion for federal relief funds.

Pandemic ‘devastating’

Under the plan announced by the Lujan Grisham administration in July, local governments around the state could apply for a slice of $150 million in grants funded by the federal CARES Act, with an additional $28 million earmarked for tribal groups.

Of the $150 million in total grants, $100 million was earmarked for local governments to reimburse them for pandemic-related expenditures.

The remaining $50 million is going toward local businesses grants – they will be administered by cities and counties – made available to businesses with 50 or fewer full-time employees.

Demand for the federal relief funds was high, as cities and counties submitted applications seeking a combined $191 million in federal aid for virus-related expense reimbursements – or nearly double the amount available.

“The pandemic has been devastating for all of us, not least local governments and small businesses across our state,” Lujan Grisham said in a Tuesday statement. “My administration will continue to deliver whatever resources we have and can make available to help our communities maintain essential services and respond to the public health emergency.”

While no local government application was denied, Santa Fe received not only a lot more money but a larger percentage of its request than many other municipalities.

By comparison, Bernalillo and Hobbs both got less than half of what they sought. And Farmington received only about one-third of its requested funding – it was awarded $1.2 million of the $3.5 million it applied for.

Las Vegas Mayor Louie Trujillo, whose city received $2.4 million, or about 54% of its request, said that he’s grateful for the money he did receive but that it’s unclear why some governments got a larger percentage.

“I couldn’t understand why certain communities got what they got,” he said.

Direct funding

Albuquerque and Bernalillo County were not on the list of cities and counties getting federal funding that was released Tuesday by the Lujan Grisham administration.

That’s because the city and county were among the more populous communities nationwide that received direct funding from the federal CARES Act.

Meanwhile, the grant program is New Mexico’s latest attempt to address the economic impact of the ongoing coronavirus outbreak, which has caused many businesses to close and the state’s jobless rate to skyrocket to 12.7%, as of July.

Lawmakers also approved legislation to make low-interest loans to help small businesses and local governments. Money from the Severance Tax Permanent Fund will 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.

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