Copyright © 2021 Albuquerque Journal
SANTA FE – Legislative analysts say New Mexico failed to meet federal reporting requirements outlining the state’s use of federal stimulus funding, though it isn’t clear there’s any legal consequence.
An annual report submitted by the state Department of Finance and Administration didn’t contain information addressing seven of the 11 minimum reporting requirements sought by the U.S. Treasury Department, according to analysts for the Legislative Finance Committee.
New Mexico’s seven-page public report, in fact, was actually shorter than the 11-page federal template and instructions for what it should contain.
Sen. George Muñoz, a Gallup Democrat and vice chairman of the LFC, said the lack of reporting reflects a broader concern – that New Mexico won’t make prompt, effective use of the $1.75 billion provided under the American Rescue Plan Act.
“We cannot set ourselves up for failure,” Muñoz said this week after hearing from legislative analysts.
Debbie Romero, the Cabinet secretary who leads the Department of Finance and Administration, said the report covered only the first five months of funding under the American Rescue Plan Act.
“We are still building the programs and initiatives to roll out all the funds, which will be better reflected in the coming quarterly reports,” she said in a written statement. “We continue to follow the federal government’s guidance and maintain communication as that guidance evolves. Currently, we are not at risk of losing funds.”
In testimony at the state Capitol, Catherine Dry, a program evaluator for the Legislative Finance Committee, the research and accountability arm of the Legislature, said other states submitted more robust annual plans.
Colorado even established a recovery office, her report said, to coordinate across state agencies and establish performance measures for how the funds are used.
New Mexico’s slimmed-down report, Dry said, leaves the public and federal government with less information about how the state is using its money and may hamper accountability.
But she didn’t suggest New Mexico was in any danger of federal sanctions.
“I don’t believe there are consequences for failed compliance,” Dry told lawmakers.
The federal instruction packet and template for the annual report encourages states to tailor the report to reflect their needs. But it also directs states to address specific topics, such as how their plans promote equity among different demographic groups, using qualitative and quantitative data.
There are also questions on labor practices, serving residents with limited English proficiency and evaluating the effectiveness of programs.
The LFC report said New Mexico’s reporting didn’t include information on future plans for using the funds, promotion of equitable outcomes, use of evidence and other topics.
The report covers activity through July 31 and was due Aug. 31. Annual reports are due each year through 2027.
The report comes as some legislators and Gov. Michelle Lujan Grisham’s administration remain at odds over who has authority to allocate federal stimulus funds. The governor contends the federal funding is within her purview and not subject to appropriation decisions by the Legislature.
The issue is now before the state Supreme Court. Senate Minority Leader Greg Baca, R-Belen, and Sen. Jacob Candelaria, D-Albuquerque, filed a petition asking the court to bar Lujan Grisham from allocating the roughly $1.1 billion that hasn’t been spent yet.
New Mexico’s Recovery Plan includes an executive summary stating that the state “is committed to ensuring that the ARPA funds are focused in high-risk areas where crime and public health are most in need.”
The report captures spending through July 31, but not anything since then.
It details about $63 million in funding issued to local governments and explains that almost $657 million in federal money was used to replenish the Unemployment Insurance Trust Fund.
Another $8.4 million went to the “Vax 2 the Max” sweepstakes campaign to distribute $100 incentives to residents who got vaccinated at certain times and established a cash lottery for vaccine recipients.
“The result of this initiative is a higher number of vaccinated residents of the state, as well as boosting the economy as the funds are used locally by residents for necessary items,” the state Recovery Plan said.