Officials from the New Mexico Department of Justice and the state Department of Finance and Administration met with the House Judiciary Committee on Friday, Jan. 31, 2025. (Photo by Austin Fisher / Source NM)
New Mexico Department of Justice Chief Deputy James Grayson says his department is tracking disruptions in funding as a result of President Donald Trump’s attempt to freeze federal grants and loans.
“We are working very closely with the governor’s Office, and we want to make sure that New Mexico, at the state level and the local government level, that all federal funds that are due are received,” Grayson said Friday during a meeting with the House Judiciary Committee and the state Department of Finance Administration. “The New Mexico Department of Justice is very carefully monitoring the situation, which is developing day by day.”
New Mexico Attorney General Raúl Torrez joined attorneys general in 22 states and the District of Columbia who filed a federal lawsuit earlier this week challenging the order.
The federal district judge in the case issued a temporary restraining order against the funding freeze Friday afternoon.
Federal judge blocks Trump plan to freeze spending on grants, loans
The judge’s temporary restraining order means the status quo stands, Grayson said, and the directive to suspend federal funding has been paused until the states’ motion for preliminary injunction can be argued in front of the judge. It’s on a “fast track,” he said, so it will be argued within 14 days.
“This is something that has been jarring to our communities and nonprofits,” said Cecilia Mavrommatis, Local Government Division director at DFA.
“We have nonprofit organizations that work with the cities that get federal money, and they’re a little freaked out,” she said, including domestic violence shelters and youth services organizations.
Acting State Controller Mark Melhoff’s office at DFA oversees financing and accounting for all state agencies. He said the state government receives almost all of its federal money through reimbursement, where it spends money up front and then makes a request for a “draw down.”
On Monday and Tuesday, Trump’s executive orders disrupted the portals people use to make those drawdown requests, Melhoff said.
“Folks were having trouble getting in and submitting the drawdowns,” Melhoff said. “As of today, as far as I know, most of that has been taken care of.”
On Wednesday, members of the House Appropriations Committee were told the Health Care Authority had been temporarily unable to access $40 million, for instance. Marina Piña, director of communications and marketing subsequently confirmed to Source via email that “the federal draw of $40 million to support Medicaid is no longer on pause, and the state has successfully secured the funds.”
But in case more disruptions occur, Melhoff said, “It’s really important for all of us in state government to know what we’re allowed to draw down for, and as soon as we’re ready to do it, we should do it and not wait.”
“Cutting off the funds in such a sudden manner is catastrophic for patients, for providers who are unable to recoup those funds, for state and local governments who absolutely need to get these projects paid for, and maybe have already encumbered and have their own contract,” said House Majority Floor Leader Reena Szczepanski (D-Santa Fe).