Should the State Pay Private Business for Pandemic Closures–Twice?

Today (11/24/20) the NM legislature is slated to meet to provide additional economic aid to businesses and individuals injured by pandemic-related closures, authorizing hundreds of millions of dollars to shore up budgets and pocketbooks. Whatever passes from today’s special session will be added to the $400 million already appropriated for the Small Business Recovery Loan fund, to other loans and grants approved during the June 2020 special session, and to unemployment benefits for individuals affected by the pandemic.

At the same time that hundreds of millions of dollars are being set aside for pandemic relief in one form or another, dozens of businesses across the state have sought the aid of state courts to award them compensation under the state constitution or the Public Health Emergency Response Act. Their basic argument is that government-ordered closures and other restrictions cause businesses to lose revenue to which they are otherwise entitled. Because the government action triggers the closures, these businesses argue that government must compensate them, despite providing for loans and grants such as those being debated today.

The State Supreme Court last Friday agreed to consider the businesses’ claims for compensation in one case in an order likely to affect at least ten more undecided cases. The Court ordered briefing and set oral arguments for January 13, 2121. At that time, the Court will consider whether it is necessary for the State to provide even more than the taxpayer dollars the legislature is appropriating for pandemic response.