State committee discusses long term negative economic effects of coronavirus in New Mexico

Coronavirus

SANTA FE, N.M. (KRQE) – The effects of the coronavirus will be felt in New Mexico for years. Friday, lawmakers say jobs will continue to be scarce and the state might be faced with more cuts in the next year.

The Revenue Stabilization and Tax Policy Committee met today to talk about what the next few months and fiscal year will look like for New Mexico. The biggest impact the coronavirus had on our state was the loss of jobs, especially those in the hospitality industry.

Six hundred and eighty-seven businesses closed in New Mexico since the start of the pandemic. Of those, 355 were permanent closures, and about 210 of those were restaurants.

During Friday’s meeting, the committee referenced a study by the University of Chicago noting that as many as four in ten lost jobs may never return. It was noted that even if the virus begins to fade, the economy may not pick up because people are going to be more cautious than ever with their spending.

The committee also mentioned the state is doing better than they anticipated when it comes to the state revenue and reserves. However, they cautioned tough decisions will still need to be made during the legislative session in January.

“We’ve sent out instructions to state agencies that we would like to see 5% reductions, with the exception of public schools, Medicaid, and Department of Health. We think those agencies, we’ve asked them to target about 3% reductions,” a committee member said.

Those state agencies mentioned are already having a hard time deciding what to cut. With the upcoming session in January, the committee warns making more cuts may start to affect programs and services that New Mexicans really need.

The committee also says New Mexico relies heavily on federal aid. They are currently waiting to see what Congress decides when it comes to another round of stimulus checks.


New Mexico Coronavirus Resource Guide

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