The U.S. Treasury announced Monday the state of New Mexico will receive $1.75 billion in federal pandemic relief aid, part of an effort by President Joe Biden and Congress to help governments respond to the economic fallout from COVID-19 and position the nation for recovery.

Though the Treasury also released details on how the money can be spent, Gov. Michelle Lujan Grisham and legislative leaders remain in a stalemate over which branch of government has the authority to appropriate federal funds from the American Rescue Plan Act.

Last month, Lujan Grisham used her executive power to line-item veto over $1 billion in one-time expenditures for fiscal year 2022 from federal pandemic relief funds the state expected to receive. In her veto message, the Democratic governor said she considered the appropriations an impermissible attempt by the Legislature to control the allocation of federal funds, generating pushback from lawmakers on both sides of the aisle who have discussed the possibility of taking the governor to court to settle the long-unresolved issue.

“I firmly believe the Legislature is the appropriating body, and I firmly believe that this question needs to be answered,” Sen. George Muñoz, a Gallup Democrat who chairs the powerful Senate Finance Committee, said in a telephone interview.

“We need a determination so we have a final answer, so we know exactly what to do, so we’re not doing the dance and then suffering afterward,” he added. “We just need the question answered. Is it a black or is it white?”

A spokeswoman for the governor didn’t directly address the disagreement between the executive and legislative branches of government but wrote in an email the state is in the process of thoroughly reviewing the detailed guidance from the Treasury.

“From a top glance, we’re glad to be able to begin planning to allocate the federal funds to effective and impactful use benefitting New Mexicans across the state,” Nora Meyers Sackett, the governor’s press secretary, wrote in the email.

“The Unemployment Insurance fund remains a top priority, as does supplementing lost revenue for state agencies, in addition to focusing on behavioral health, broadband, and the recovery of economic drivers like the tourism and hospitality industry,” Sackett added. “The state is committed to distributing funds equitably and ensuring that the hardest hit communities receive the support they need.”

Muñoz agreed a deep dive into the Treasury Department’s guidelines should be the first order of business.

“Then we can really sit down to determine whether we have a case or don’t have a case,” he said.

The two branches of government are in agreement in some respects.

The Treasury guidance allows states to replenish unemployment trust funds to pre-pandemic levels, and both the governor and legislators have signaled an interest in using a large portion of relief funds to rebuild the state’s unemployment fund, which would then limit future increases in payroll taxes that underwrite unemployment insurance for the private sector.

“We know that these funds aren’t going to expire until 2024, so we want to make sure that they’re very targeted and they fix very targeted problems like the [unemployment] fund in New Mexico,” Muñoz said.

In a fact sheet about the $350 billion in Coronavirus State and Local Fiscal Recovery Funds, the Treasury Department said governments have “broad flexibility to decide how best to use this funding to meet the needs of their communities.” There are restrictions, such as funding debt service.

In New Mexico, the question over who has spending authority could lead to a standoff.

Muñoz and Rep. Patty Lundstrom, also a Gallup Democrat and chairwoman of the Legislative Finance Committee, wrote a letter to State Treasurer Tim Eichenberg last week saying state law requires the treasurer to credit all undesignated revenues to the general fund.

“We contend these ARPA [American Rescue Plan Act] state relief revenues should be deposited into the general fund and appropriated by the Legislature, and per your constitutional and statutory duties as Treasurer should ensure general fund revenue is not diverted or expended from the treasury without an appropriation from the Legislature,” they wrote.

“If the money is placed in the general, then the statute says the Legislature shall appropriate,” Muñoz said.

Lundstrom did not return a message seeking comment.

While the state has until 2024 to spend the money, the clock is already ticking.

Muñoz said the state received half of the $1.75 billion Monday. The remaining balance is expected in a year.

The state fared better than expected. New Mexico was expecting to receive $1.6 billion.

The Associated Press contributed to this report.

Follow Daniel J. Chacón on Twitter @danieljchacon.

(17) comments

Mike Johnson

Ah yes, the most dangerous place on earth is standing between corrupt politicians engaged in a food fight over pork they can use for political purposes. "“From a top glance, we’re glad to be able to begin planning to allocate the federal funds to effective and impactful use benefitting New Mexicans across the state,” Nora Meyers Sackett, the governor’s press secretary, wrote in the email." Indeed, no doubt the Guv.'s special interest are already lining up to collect their payoffs for their massive campaign donations to MLG. But wait, state legislators also have "needs" in spreading the pork for political impacts. Yes, this will be an interesting kerfuffle, and would be entertaining if it were not for the fact that $1.75 billion of our money is being wasted on political actors special interests, not serving the people's interests.

Lupe Molina

The most dangerous place on earth?! Its a scary place, that fantasy world of yours Dr. Mike.

Lee DiFiore

Yay, free money. Oh wait, your kids will have to pay this back.

John Cook

Making the kids pay it back is Republican policy. Biden is going to make the corporations and the rich who have paid nothing for the past many years pay for it.

Lee DiFiore

Got a bridge in NY for sale if you're interested.

Paul Davis

It's a bit more complicated than that. Governments that control a sovereign currency don't necessarily operate like your household, company or city. There's a lot of work coming out the MMT (Modern Monetary Theory) of economics that makes a strong case that the simplistic understanding of this sort of thing, based on "everyday people economics" is just wrong. MMT argues that governments that control their currency can and should do this sort of thing, and that the traditional idea that "we have to pay it back" is just wrong. There is a risk of inflation, which MMT acknowledges, but then goes on to explain why that risk has been massively overstated for nearly 50 years.

Chris Mechels

Our little Governor seems to forget that the "Executive" branch is to "execute" and the Legislature legislates. MLG has grown far too fond of her "emergency" powers, even though the "emergency" has passed, by her own declaration. We may have to carry her out by force, still yammering away about her powers, and signing more "emergency" trash.

Boy, we sure know how to pick 'em. Michelle needs therapy, and we need relief from her craziness.

Lupe Molina

Name one measure that you can prove was outside of her authority as governor. Just one thing, clearly stated.

Lupe Molina

Lol. Nothing? From none of you? Bunch of cry babies.

rodney carswell


Mike Johnson

[thumbup][thumbup][thumbup] Well said Chris!

Jake Greene

Let's see: The question posed is should a body of elected officials that waited forty-plus years after Rowe v. Wade to remove a state law criminalizing abortion or a governor proven capable of taking decisive action in an emergency direct the spending of ARPA relief funds? Oooh, tough choice.

George Welland


Like the jobless who won't work because they can stay on the dole and receive enhanced unemployment insurance benefits... I think our elected representatives, who's districts receive these relief funds should start looking for another job by making at least two job contacts a week...PLEASE!

John Cook

The enhanced unemployment benefits should set a new standard for minimum wages by employers. A person working a full-time job should make a living wage. When employers offer more money than unemployment benefits they will be able to hire workers. It's high time we reset the balance between workers and capital. The Republican party now claims to be the 'party of the working man'. Great. Get on board for employers paying a living wage to the working men and women.

Lupe Molina

Yeah, John gets it. If a couple hundred dollars a week and a questionnaire that violates your privacy is still preferable to getting a job, maybe the problem is with the jobs. Working less than minimum wage as wait staff or a cashier just so people can act rude and morally superior frankly doesn't preferable. This country needs to cut the fat off the billionaires and make sure jobs are actually worth working.

Carlos Vasquez


George Welland

P.S. - Actually, no one that "works," um, I guess I should say "administers" or "manages" the program at NMDWS could even get a job flipping burgers (I wouldn't trust them with my food!); so, why make them look for work; I'd pay them twice their current salary to just leave if I could! Yes, that goes for the new Secretary also ... that place, like a fish, rotted from the head down years ago!

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