Sad Day for NM: Bill to Help Small Biz Killed

  • Post published:March 18, 2015
  • Post category:Issues

With the NMBC providing expert witness testimony during the committee hearings, HB 482 sponsored by Rep Larry Larranaga had bi-partisan support in both of its House committees. The NMBC had rallied strong community support for HB 482 from individuals, employers and groups representing hundreds of businesses, many of which were being pummeled by high State Unemployment Taxes (SUTA).

What was the opposition to HB 482? There was a passionate reminder that two years ago, when the business community stepped up and agreed to a higher rate structure to help assure the solvency of the fund, there was no opposition from labor. Why would labor oppose the business community doing the right thing and agreeing to increased rates? Other arguments against the bill included statements that New Mexico’s economy is fine, the UI Trust Fund is fine, and we should never consider making adjustments to UI benefits. Really?

The truth about New Mexico’s UI benefits: 1) New Mexico’s UI Trust Fund currently has a balance of about $86 million, down from $557 million in 2008. The U.S. Dept of Labor requires a balance of $400 million for the fund to be considered adequate. NM Dept of Workforce Solutions estimates the fund balance will be $155 million at the year end; however that does not recognize potential layoffs in the Oil and Gas industry, which many say are inevitable. 2) New Mexico is a complete outlier and by far the highest of all states using a total wage factor formula. Of the 29 states using this formula, the majority use a factor of 33 percent. Our surrounding states use factors from 33 percent (AZ and CO) down to a low of 24 percent (TX). New Mexico is currently using a factor of 60 percent!

The UI rate bill that passed two years ago with an effective date of 1/1/15 had unintended consequences of rate increases of up to 4000 percent for some employers (4000 is NOT a typo). This session, businesses and groups rallied behind HB 482 to scale back UI payments and shorten the time that some employees would receive them. While the maximum benefit time period of up to 26 weeks remained unchanged, those employees who were less attached to the workforce (meaning employed less than the full four quarters used to calculate benefits), would have seen their benefit period reduced with this legislation. Why should NM pay extended length UI benefits to those who are not fully attached to the workforce?

Closing the House floor debate on Monday night, Rep Larranaga explained the bill was a good and necessary measure to help assure the adequacy of the UI Trust Fund in order to provide UI benefits for those who need them most. He also stated this was a bill to help New Mexico’s small businesses.

After over two hours of debate, a final vote was taken and legislators from both parties voted to kill HB 482 by a vote of 39 – 25.

The NMBC would like to thank the following Representatives who voted ‘Yes’ in support of HB 482:

David Adkins Nate Gentry Bill Rehm Paul Bandy Jim Hall Larry Scott Cathrynn Brown Yvette Herrell Jim Strickler Zachary Cook Dona Irwin James Townsend Randal Crowder Larry Larranaga Don Tripp Jim Dines Tim Lewis Bob Wooley Nora Espinoza Rick Little John Zimmerman Candy Spence Ezzell Rod Montoya David Gallegos Andy Nunez

These are the Representatives who voted to kill HB 482:

Eliseo Alcon D. Wonda Johnson Dennis Roch Deborah Armstrong Georgene Louis Debbie Rodella Alonzo Baldonado Patricia Lundstrom G. Andres Romero Gail Chasey James Roger Madalena Patricia Roybal Caballero Sharon Clahchischilliage Antonio “Moe” Maestas Patrico Ruiloba Brian Egolf Sarah Maestas Barnes Tomas Salazar Kelly Fajardo Stephanie Maez Jim Smith Doreen Gallegos Javier Martinez Sharon Williams Stapleton Miguel Garcia W. Ken Martinez Jim Steinborn Stephanie Richard Garcia Bill McCamley Carl Trujillo Bill Gomez Terry McMillan Christine Trujillo Bobby Gonzales Matthew McQueen Jim Trujillo Conrad James Paul Pacheco Monica Youngblood

The following Representatives were excused from the Floor at the time of the vote:

George Dodge Nick Salazar Dianne Hamilton Lucky Varela Representatives who did not vote: Jason Harper Jane Powdrell-Culbert