House OKs new pandemic relief grant program

Opponents say direct aid to businesses unconstitutional

SANTA FE — A proposal to establish a $200 million grant program for New Mexico businesses damaged by the pandemic picked up bipartisan support Thursday as it passed the House.

Opponents of the bill — all Republicans — raised legal questions about whether it’s appropriate to send state cash to local businesses, however worthy the goal.

The legislation, nonetheless, passed 51-16, with eight Republicans joining 43 Democrats in favor. House Bill 11 now moves to the Senate.

Democratic Rep. Christine Chandler of Los Alamos assured her colleagues that the economic aid would be legal under a provision in the state Constitution that allows the public to provide land, buildings and infrastructure to promote job creation.

The bill would allow businesses to apply for grants to help with mortgage or rent payments. They could get up to $100,000, and the state would prioritize businesses that had the greatest declines in revenue last year.

The businesses would have to show that they remain open and have added employees. The aid would be targeted at smaller businesses that have up to 75 employees per location.

Funding for the program would come from the state’s financial reserves of about $2.5 billion, which equals about 35% of annual state spending.

“Given where our businesses are and the support that they need,” Chandler said, “I think this is a very small investment to support small- and medium-sided businesses in New Mexico.”

House Minority Leader Rod Montoya, R-Farmington, said he wasn’t convinced the grants would match what’s authorized in the Constitution.

“I believe this is completely unconstitutional,” Montoya said.

Legislative leaders say pandemic relief is a priority for quick action this session. Earlier this week, the Senate approved bills that would authorize $600 rebates to workers who make $15 an hour or less, a four-month tax holiday for restaurants and breweries, and revisions to a loan program for small businesses.

New Mexico’s preliminary unemployment rate climbed to 8.2% in December, higher than all but four other states, according to the U.S. Bureau of Labor Statistics.

Members of the state House on Thursday said they hope the $200 million grant program will help.

“This is desperately needed in the north,” said Rep. Susan Herrera, an Embudo Democrat whose district stretches from Española to the Colorado border.

The proposal wouldn’t prohibit legislators from applying for aid under the new grant program. But House Speaker Brian Egolf, D-Santa Fe, advised members against applying, “out of an abundance of caution.”

Chandler and Egolf co-sponsored the bill.