The Latest: New Mexico governor vetoes tax increases

SANTA FE, N.M. (AP) — The Latest on New Mexico's state budget crisis (all times local): 11:10 a.m. New Mexico Gov. Susana Martinez has vetoed a $350 million package of tax and fee increases designed to shore up shaky state government finances. Martinez said Friday in a veto message that the Legislature ignored her repeated promises to veto tax increases. She says a proposal to raise taxes on gasoline and diesel sales would place an undue burden on families. She also objects to new taxes on the sale of vehicles and trucking permit fees approved by the Democrat-led Legislature. New Mexico's traditional streams of tax revenue have been eroded by relatively weak energy prices and a stagnant local economy, with reserves nearly depleted. Martinez says she will call a special session to resolve a $156 million budget shortfall, but has not specified when. She is urging lawmakers to support a tax-code overhaul designed to improve the state's business climate by eliminating hundreds of tax breaks, including long-standing exemptions for nonprofit organizations. The reforms would lower standard tax rates on sales and services. ___ 10:50 a.m. New Mexico Gov. Susana Martinez has vetoed major portions of a $6.1 billion spending bill for the coming fiscal year, including funding for higher education and the Legislature. The Republican governor on Friday said in a veto message that the state's Democrat-led Legislature has refused to bear its fair share of reductions in state spending. In vetoing funding for state colleges and universities, Martinez chastised the state Senate for refusing to hold hearings on her nominations for regents. She says funding issues for higher-education and political appointments can be addressed during an upcoming special legislative session. Martinez also has vetoed a capital spending bill that would have restored $46 million in money taken from public school district reserves this year to address a state general fund deficit. The governor favors using those funds instead to shore up state finances and avoid proposed tax increases. ___ 3:00 a.m. New Mexico Gov. Susana Martinez is drawing a line in the sand against tax increases and state government spending with hours left to sign or veto provisions of a budget plan from the Legislature. Martinez has until noon on Friday to consider a $6.1 billion spending bill that shores up funding for public schools and courts in the coming fiscal year. The Republican governor on Thursday renewed criticism of companion legislation to bring in $350 million by increasing taxes on gasoline, hiking permit fees for trucks and reduce tax exemptions on nonprofit hospitals. She wants to reconvene the Democratic-led Legislature soon. Senate Finance Committee Chairman John Arthur Smith says the governor's proposals to limit tax revenues and government spending could drive up unemployment and threaten the state's credit rating.