March 23, 2020
FOR IMMEDIATE RELEASE
CONTACT: Sharon Kayne, Communications Director, NM Voices for Children
505-361-1288 (direct), 505-401-8709 (c), email@example.com
OR: Elizabeth Lee: Elizabeth Lee; 202.408.1080; Center on Budget and Policy Priorities
ALBUQUERQUE, NM—New Mexico is among seven states that are fairly well prepared for America’s recession, according to a new report from the Center on Budget and Policy Priorities. New Mexico ranks in the top ten of all states on two of the four measures of preparedness for the economic slowdown, which is taking hold amid the COVID-19 pandemic. Having adequate budget reserves and accessible Medicaid coverage are the two policy areas where New Mexico is doing well. Still, state actions will be as essential as federal responses in the weeks and months ahead, according to the report.
“It is especially important that New Mexico is relatively well-prepared to weather a recession because we will be harder hit than other states by lower oil and gas prices due to our over-reliance on that industry as a revenue source,” said James Jimenez, executive director of New Mexico Voices for Children, which is partnering with CBPP to release this report. “Still, recessions are hardest on those who earn the lowest incomes, and a large share of New Mexicans fall into that category. Our federal and state lawmakers must continue to expand and streamline policies and programs that soften the economic crisis by protecting workers from job losses and wage cuts, health insurance losses, barriers to education, and other cascading effects.”
Even the highest performing states will struggle to manage the fiscal and public health crises that are currently unfolding, say the report authors. While the federal government’s proposed economic responses will provide much-needed assistance, how states react will be more important now than ever.
“State policy is very important in determining how people fare in a recession,” explained the report’s lead author, Michael Leachman, senior director of state fiscal research at CBPP. “This recession is likely to be significant and difficult for all states – but especially severe for those that have failed to prepare.”
No state scores in the top ten for all four areas of recession preparedness, and New Mexico is less prepared than other states in ensuring that our unemployment insurance system is robust and that college is affordable.
The four recession preparedness policies are:
- Adequate budget reserves, which help lawmakers avoid cuts to essential services that are especially important in times of economic crisis. Thanks to two years’ worth of high oil process, New Mexico has been able to rebuild its reserves to 25 percent, enabling it to rank 4th on this measure.
- Accessible Medicaid coverage, which makes it easier for families who have lost jobs or are suffering other adverse impacts to get health care. New Mexico has enacted all six of the recommended policies for Medicaid accessibility.
- Strong unemployment insurance systems, which affect how well families do during and even after a recession. New Mexico’s UI system has a low recipiency rate, ranking us 38th on that measure, but we rank 15th on the amount of benefits as a share of wages.
- Affordable colleges and universities, which allow residents to boost their skills and training when jobs are scarce. New Mexico ranks 3rd on the ratio of tuition to higher education spending and 17th on cost of attendance as compared to median income.
That New Mexico does well in some areas is due to smart bi-partisan policy decisions by the governor and legislators that have ensured robust reserves and shored up the state’s Medicaid program so that those who use it can rely on it, especially during tough times. However, New Mexico’s state and federal lawmakers can and must do more to protect residents from health and economic hardship.
CBPP’s report is available online at https://www.cbpp.org/research/state-budget-and-tax/some-states-much-better-prepared-than-others-for-recession