Legal separation is little different from divorce, except that you're not divorced. If you plan on divorcing him, then do that - it will be less expensive than filing legal separation now and divorce later.
Do give the address in NM to the state office that is paying you aid- they deserve to be reimbursed for the money the state is paying to support hIS kids. When the tax refund comes it will be in both your names (if you filed jointly). How will you get him to sign it over to you? Do you still have an account with both names on it that you could deposit it into?
Incidentally, what did he get fired for? Drugs? Or just flakiness?