2021 JULY 10 ISSUE: UNEMPLOYMENT INSURANCE TRUST FUND RECOUPS
The New Mexico Department of Workforce Solutions will be receiving more than $600 million in American Rescue Plan Act funding from the New Mexico Department of Finance and Administration to replenish the Unemployment Insurance Trust Fund, as well as to pay back a federal loan issued by the U.S. Department of Labor. That loan was to support the surge of unemployment insurance claimants during the COVID-19 pandemic. The state’s Trust Fund balance on Jan. 27, 2020, was $460.1 million. Later, after the onset of the pandemic in March, the state's number of unemployment claimants increased by more than 1,300 percent in a matter of weeks.
The economic impact of the pandemic pushed almost 200,000 individuals, at the peak, into the state's unemployment insurance system; the State was able to disburse almost $4 billion to displaced workers and New Mexicans all across the state amid the crisis. The number of claimants qualifying for state and federal unemployment benefits, however, contributed to the depletion of the trust fund by mid-September 2020. The funds transferred will be used to both complete the repayment of the federal loan and re-establish the trust fund to its pre-pandemic levels. The trust fund balance, after payments and transfers are completed, will be $460 million.
The total loan received by Workforce Solutions from the U.S. Department of Labor to continue getting benefits to New Mexicans in need was $284 million. On June 24, 2021, the department made a $100 million loan payment, a sum appropriated to the department from the state general fund in the 2021 legislative session. The remainder of the loan balance will be repaid with federal funding.