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Solution Sought To Shore Up Jobless Fund

SANTA FE – Both Gov. Susana Martinez and the legislative sponsor of a bill that was intended to shore up New Mexico’s jobless fund are pushing for action to avoid a potentially drastic contribution hike for businesses in 2012.

They just happen to be pushing in different directions.

Martinez opposes the idea of imposing slightly higher contribution rates on businesses to avoid a larger rate hike down the road, and she used her line-item veto powers to strike down a portion of a bill that called for such an approach.

Instead, she wants to extend the current contribution rate on businesses – which she describes as a tax – for another year and plans to add the proposal to the agenda of a redistricting session the Legislature is expected to hold in September. The Governor’s Office has been in talks with top-ranking lawmakers on the issue.

“She’s hopeful that a bipartisan solution can be reached in the upcoming special session and will encourage lawmakers to approach it in a way that puts more New Mexicans back to work,” Martinez spokesman Scott Darnell said.

Meanwhile, Rep. Mimi Stewart, D-Albuquerque, and other Democratic lawmakers have filed a court challenge aimed at having Martinez’s veto tossed out.

If successful in the New Mexico Supreme Court, the challenge could render discussion of the unemployment issue in a special session largely moot. A hearing on the issue is scheduled for June 22.

At issue is the state’s unemployment insurance fund, which is headed toward depletion due to high rates of recession-fueled unemployment.

Stewart said the Legislature’s approach, supported by several business groups, would shore up the fund by imposing a moderate contribution rate increase.

She said Martinez’s veto of House Bill 59 was unconstitutional, claiming the governor has authority to sign or veto a bill that doesn’t appropriate funding, but not alter it.

“She’s trying to spin it in her own way,” Stewart said of Martinez’s description of the bill as a tax hike. “We already dealt with (the issue), and we did what we thought was a very balanced approach.”

However, the legislative approach, in Martinez’s view, would make it more expensive for businesses to hire new workers and could actually worsen the state’s unemployment situation.

In addition, Martinez has vowed not to increase taxes during her four-year term.

The contribution rate paid by businesses into the jobless fund has been set in advance on a year-to-year basis by legislators during recent years, preventing the rate from fluctuating every three months.

Employers currently pay an average of about $215 annually per employee into the fund, which helps pay jobless benefits. Under the legislation partly vetoed by Martinez, the rate would increase to $370 per employee next year.

If no advance action is taken, the rate would most likely jump to the highest level possible in 2012, an average of about $512 per employee. The state would also have to borrow money from the federal government if the fund goes insolvent.

The unemployment fund had a balance of about $153 million as of May 31, according to the Workforce Solutions Department. That’s down from about $163 million in mid-May.

— This article appeared on page C1 of the Albuquerque Journal

Cutline – MARTINEZ: Governor vetoed part of measure