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New Mexico races to spend federal rental assistance

New Mexico Gov. Michelle Lujan Grisham speaks at a news conference July 29 in Santa Fe. (AP Photo/Morgan Lee/Associated Press file )

SANTA FE – State agencies spent federal pandemic aid at a furious pace during the month of August, channeling about $630 million in efforts to bolster unemployment reserves, provide emergency housing assistance and promote COVID-19 vaccination efforts, the Legislature’s budget and accountability office said Wednesday.

An update on pandemic relief spending from the office shows that New Mexico agencies have pushed out more than half of their $10.5 billion share of federal relief tied to the pandemic.

Of the $6.3 billion spent so far, about 70% has gone toward unemployment benefits to prop up household income amid economic turmoil associated with COVID-19.

State finance officials are racing against a deadline at the end of September to distribute at least $104 million in federal rental assistance to residential landlords and tenants or risk forfeiting additional money to the program.

As of mid-September, the state had spent or assigned $51 million of that federal rental assistance. State finance officials are providing assurances that New Mexico will meet the deadline as it partners with courts to avoid housing disruptions.

New Mexico is among about a dozen states that still have a moratorium on evictions for people who cannot afford to pay rent.

Federal supplementary unemployment benefits of $300 a week expired in early September, but New Mexico is allowing a 13-week extension of standard benefit payments.

The federal government will pay for half of those extended benefits – as long as the state’s unemployment rate exceeds 6.5%. The August unemployment rate was 7.2%, down from 7.6% in July.

Unemployment benefit-eligibility notices were sent to 11,000 state residents, but many already may have exhausted their benefits during the pandemic.

Full enrollment for a 13-week period would cost the state unemployment insurance trust $23.5 million. Ordinarily, payroll taxes underwrite the trust.

New Mexico Gov. Michelle Lujan Grisham has lifted the state’s once-aggressive pandemic-related restrictions on gatherings and business operations, though masks are still required in public, indoor settings.

About 4,700 people have died from COVID-19 across the state of 2.1 million residents. Nearly 250,000 cases have been diagnosed.

State health officials said during a briefing Wednesday that despite persistent high community transmission rates, COVID-19 cases appear to have plateaued and that hospitalizations are projected to decline in the coming weeks.

They also reported that 70% of New Mexicans 18 and older are now fully vaccinated. Deputy Health Secretary Laura Parajón called it “an incredible milestone.”

The latest state data also shows that children ages 5 to 17 make up one-fifth of the state’s new COVID-19 cases but that very few of those cases have resulted in hospitalizations. Vaccinations have yet to be approved for many within that age group.

In other financial developments, relief spending has been painstakingly slow when it comes to $200 million set aside from the state general fund for grants to small- and medium-sized businesses that can offset rent, lease or mortgage payments as they rehire staff members.

New Mexico Finance Authority CEO Marquita Russel told legislators that about 17% of applications are declined because businesses are rehiring contract workers and not staff members.

“We have only funded about $10 million outright,” Russel said of applications to the grant program. “We have additional ones that we are currently working through.”