Moody's says New Mexico budget woes weakens school finances

SANTA FE, N.M. (AP) — A credit rating agency says New Mexico's decision to draw down cash balances at public schools to plug a state budget deficit has weakened the financial footings of many school districts. An analysis by Moody's Investors Services on Monday said further declines in state aid may result in downgrades to districts' credit ratings. Currently, the ability of New Mexico school districts to pay their debts remains largely unaffected. New Mexico Gov. Susan Martinez signed off on a plan to fix the state's budget deficit in part by cutting $46 million in school district funding with exceptions for districts with reserves of 3 percent or less. Moody's says those cuts combined with previous reductions in October leave 10 districts with less than 2 percent of annual revenues in reserves.