Copyright © 2021 Albuquerque Journal
Lawmakers hope to use around $600 million in federal funding to help New Mexico replenish its empty unemployment fund, but details on how that money can be used remain murky.
Since New Mexico’s unemployment fund ran out of money in September, the state has borrowed just under $234 million from the federal government so that it can continue funding various unemployment programs, Workforce Solutions Secretary Bill McCamley said Monday.
While lawmakers indicated that some of the funds New Mexico stands to receive through the $1.9 trillion American Rescue Plan Act will be set aside to pay that money back, McCamley said the state is waiting on guidance from the U.S. Treasury Department regarding how exactly those funds can be used.
“Until we get that specific ruling from them, we can’t game-plan for that money,” McCamley said.
Since the beginning of last March, the Department of Workforce Solutions has paid out more than $3.5 billion in unemployment benefits across various state and federal unemployment programs, according to McCamley.
The jump in unemployment claims associated with the COVID-19 pandemic caused the unemployment fund – which had a balance of more than $450 million when the pandemic began – to run out of money Sept. 8.
McCamley said that since September, the state has relied mostly on loans to continue paying benefits.
“We’re in a once-in-a-century situation here, where we went from one of the best economic conditions the state has ever seen … to one of the worst,” McCamley said.
The state hopes to allocate about $600 million in federal money to replenishing the depleted fund. However, McCamley said, the Treasury Department has not indicated whether states will be able to use part of the money to replenish the fund itself, or simply pay back the loans.
This, he added, will help determine whether the state is able to boost the unemployment fund balance enough to get through the rest of the pandemic.
“The more flexibility we have, the better,” McCamley said.
The state Workforce Solutions Department could not provide a timeline for when it expects federal guidance. However, McCamley said he wants to get as much money as possible into the fund by July 1, when the fund balance will affect tax rates for businesses.
The more money in there, the lower the rate,” McCamley said.