State taps fed­eral loans to pay un­em­ploy­ment

Since Sept. 8, the state has spent about $35 mil­lion to cover claims

Santa Fe New Mexican - - LOCAL & REGION -

New Mex­ico has de­pleted its un­em­ploy­ment ben­e­fits trust fund and be­gun to use fed­eral loans to keep up with claims — spend­ing that can trig­ger higher taxes if not re­paid, a top la­bor of­fi­cial said Tues­day.

Work­force So­lu­tions Sec­re­tary Bill McCam­ley said un­em­ploy­ment trust re­serves were ex­hausted on Sept. 8 — and that the state has spent about $35 mil­lion since then in bor­rowed fed­eral funds to main­tain un­em­ploy­ment ben­e­fits.

New Mex­ico’s un­em­ploy­ment rate of 11.4 per­cent in Au­gust ex­ceeds that of neigh­bor­ing states as health of­fi­cials take grad­ual steps to­ward re­open­ing the econ­omy and schools, where most stu­dents are still study­ing from home.

McCam­ley said about 123,000 peo­ple were re­ceiv­ing un­em­ploy­ment ben­e­fits as of last week in a state of 2.1 mil­lion res­i­dents. That’s up from 9,600 ac­tive claims in March be­fore the COVID-19 pan­demic struck.

The tourism and hos­pi­tal­ity in­dus­try has been es­pe­cially hard hit, along with oil pro­duc­tion and con­struc­tion.

In June, law­mak­ers put a freeze on un­em­ploy­ment in­surance tax rates for busi­nesses through the end of 2021. McCam­ley told a state House com­mit­tee Tues­day the state will even­tu­ally need to re­duce un­em­ploy­ment ben­e­fits, raise pay­roll taxes or bor­row or re­fi­nance fed­eral un­em­ploy­ment loans. The Lu­jan Gr­isham ad­min­is­tra­tion does not sup­port a de­crease in ben­e­fits, he said.

Many re­cip­i­ents of un­em­ploy­ment in­surance are ex­haust­ing the state’s 26-week ben­e­fit al­lowance and tap­ping into 13 weeks of ad­di­tional fed­eral un­em­ploy­ment pay­ments, at no cost to the state, McCam­ley said.

He also said the Lu­jan Gr­isham ad­min­is­tra­tion is con­tem­plat­ing a de­ci­sion on when to re­in­state a re­quire­ment that un­em­ploy­ment ben­e­fi­cia­ries ac­tively look for work — a loom­ing day of reck­on­ing for res­i­dents still hop­ing to be re­hired by prior em­ploy­ers.

“We are go­ing to start once again — de­pend­ing on the path of the virus — to start say­ing OK to ev­ery­one, ‘It’s time to get back to work,’ ” he said.

Repub­li­can leg­is­la­tors prod­ded McCam­ley for in­di­ca­tions of when the gov­er­nor might ease cur­rent busi­ness re­stric­tions un­der an emer­gency health or­der.

“In our area, peo­ple want to get back to work, they’re will­ing to take a busi­ness risk on whether or not they catch this” virus, said GOP Rep. James Strick­ler, an oil lands­man from Farm­ing­ton.

McCam­ley said the state con­tin­ues to pur­sue a science-in­ten­sive de­ci­sion process on re­open­ing the econ­omy that places a pre­mium on pub­lic health and lim­it­ing coro­n­avirus in­fec­tions.

“The more peo­ple can con­trol the virus with their be­hav­iors, the more we are go­ing to be able to feel com­fort­able in­tro­duc­ing risk into com­mu­ni­ties and hope­fully peo­ple are go­ing to get back to work,” he said.

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