New Mexico’s governor testifies before Congress about virus impact
WASHINGTON, DC -- New Mexico Gov. Michelle Lujan Grisham testified Thursday remotely to a congressional committee about the impact of the coronavirus pandemic on her state government’s budget and critical needs for federal aid to states to ensure economic recovery.
“States like mine that have taken tough and proactive measures to blunt the spread of Covid-19, must be able to use federal assistance to replace and backfill lost revenues or else make drastic, difficult cuts to essential services,” Lujan Grisham said. “Our effective, lifesaving response to the pandemic can now cannot be left as a millstone around the necks of the Mexico workers, families, local governments and small business owners.”
She said the state has spent $139 million directly on public health efforts such as coronavirus testing and protective equipment, while allocating $750 million in federal recovery funds toward reimbursing general fund spending to sustain vital services during the current fiscal year.
The governor warned that the state still is “woefully unprepared” financially to help struggling small businesses and to provide relief on mortgage and rent obligations.
New Mexico is anticipating a nearly billion-dollar general fund deficit for the coming fiscal year, starting June 30, 2021, to meet annual spending obligations of $7.2 billion. Without additional federal support, that would exhaust financial reserves that were built over the past three years.
At the same time, government income from taxes on sales and services have been surprisingly resilient after the federal government delivered stimulus checks and supplemental unemployment benefits in response to the coronavirus crisis. The budget office of the state Legislature says gross receipts tax income outpaced expectations by $225 million for the fiscal year ending June 30, amid increased retail spending online.
To meet current-year spending obligations, lawmakers tapped $750 million in federal pandemic relief funds and agreed to spend $1 billion in state financial reserves.
