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New Mexico taxpayers are likely to pay nearly $17 million in the near future to resolve seven lawsuits against the state’s child welfare agency, according to a recent committee hearing in the Legislature currently underway. This was announced by a department official at the meeting.
The $16.9 million expected to be earmarked for future litigation settlements is more than double the total amount paid by the state health department on behalf of the Department of Children, Youth and Families over the past five years.
The total cost is $14 million over five years, according to the General Services Administration, which provides insurance to the state government through its Division of Risk Management.
The Division of Risk Management oversees the New Mexico Liability Fund, which uses taxpayer money to resolve claims in court through voluntary agreements or court-ordered settlements.
In a presentation to the Senate Finance Committee on January 23, General Services Secretary Robert Doucette asked lawmakers for additional funding to prevent a shortfall in the debt fund. The Legislative Finance Council said in its budget request for the 2024 session that the Risk Management Division’s funding is $86 million short of projected liabilities.
“We make sure that if we owe something, we pay what we owe,” Doucette said.
Governor Michelle Lujan Grisham’s budget calls for $24.8 million in special spending for the Department of Risk Management. An additional $20 million in special appropriations for settlements related to CYFD would also be earmarked for the fund, according to the proposed executive budget.
**SUB: Waiting for budget
The House Appropriations Committee moved to adopt the Legislative Finance Committee’s recommendation for the General Services Department at its January 17 meeting.
The agency’s total budget is approximately $160 million. The difference between the Legislative Finance Committee’s recommendation and the executive budget is about $145,000, or a 1% difference. **
Doucette said the agency will conduct an evaluation to estimate the potential for settlement with state agencies and seek that amount from the general fund. However, settlement amounts over the past year exceeded the amounts set aside for payments.
“What concerns me is that this is the first year that we’ve exceeded our estimates,” Doucette said, adding that he doesn’t know if this is an anomaly or indicates a trend. Officials said they needed more data.
Six state agencies account for 86% of all settlements spent in New Mexico over the past five years.
The top five are: University of New Mexico Hospital, CYFD, Department of Public Safety, and New Mexico Department of Transportation.
The Division of Risk Management has paid approximately $80 million on behalf of five state entities since 2019.
Sixth is New Mexico State University, which paid $8 million in June 2023 to resolve hazing allegations.
Future settlements for Children, Youth and Family Services include two wrongful death lawsuits and several physical and sexual abuse lawsuits, Commissioner Teresa Casados told the Finance Committee on Jan. 22.
The details of these settlements have not yet been made public.
“These are obligations that we know we’re going to pay,” Doucette said. “They’re not on the Sunshine portal yet because we haven’t cut the checks.”
Doucette said the agency will submit recommendations for further action, possibly as rule changes or legislative proposals.
“We will consider whether we need to initiate a special assessment of these entities, which make up a large portion of the fund,” Doucette said.
“We’re going to focus on loss prevention,” he said. “Especially some of the agencies that were paying some of those dollars.”
Sen. William Burt (R-Alamogordo) asked whether Congress was giving “too much money” to both government agencies and risk management departments to cover their responsibilities.
Both expenditures will be under the control of the Risk Management Division, said Cecilia Mavromatis, an analyst with the New Mexico Department of Finance and Administration.
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