Business community asks governor to address state unemployment trust fund during special session | KOB 4

Business community asks governor to address state unemployment trust fund during special session

Brittany Costello
Updated: June 17, 2020 10:21 PM
Created: June 17, 2020 05:54 PM

ALBUQUERQUE, N.M. — State lawmakers and members of the business community are asking lawmakers to make the state’s unemployment trust fund a priority during the legislative special session.

“There have been hundreds of businesses that have closed permanently were still getting reports of those even as they are now allowed, most of them, to reopen in a limited capacity,” said Carla Sonntag President and Founder of the New Mexico Business Coalition. “We're hearing of more and more businesses who will not do that.”

As of June 6., a spokesperson for the Department of Workforce Solutions said there were 107,401 continued claims for unemployment. As we get closer the special session, Sonntag said that number is very important because the money to pay those claims comes from the state's Unemployment Insurance Trust Fund—a fund that businesses pay into through taxes.

“For every hour that an employee works the employer pays a tax on that into the fund,” said Sonntag. “That’s to cover unemployment should something happen with the employee.”

As the pandemic continues, that trust fund continues to dwindle. Sonntag said until the fund it addressed, it will leave businesses with the burden to refill that bucket.

The taxes businesses pay is based, somewhat, on how many employees have filed for unemployment. That means the job loss due to the pandemic could create higher taxes.

“If Covid-19 would not have hit we would not have shut down businesses we would not have laid off people,” said Representative Rod Montoya, Minority Whip, over the phone Tuesday.

Representative Montoya and Sonntag have been working together on new legislation they're hoping the governor places on the call. The draft legislation is asking the state to not be allowed to include January 2020 through December 2021 when calculating the rate businesses will owe.

“The business owners across the state have stayed at home, the unemployment insurance rate is going up, no fault of their own,” said Rep. Montoya. “It’s going up because the governor shut the state down.”

Rep. Montoya sent a letter to the governor June 12. He is asking lawmakers to provide $350 million to the fund immediately.

“If we don’t fix this what it means is that it could be the final straw as we saw coming out of the great recession that will cause businesses to just say 'I can't do this,’” said Sonntag.

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