New Mexico governor has plan for budget shortfall

SANTA FE, N.M. (AP) — New Mexico Gov. Susana Martinez has a budget plan designed to close the state's funding shortfall and restore depleted reserves while sticking by her vows to avoid tax increases. Announced Tuesday, the plan preserves funding for economic development and public safety, while extending recent agency spending cuts into next year and deepening those cuts at the Legislature and state universities. It also would shrink overall compensation to state employees by decreasing pension contributions. Amid a downturn in the oil sector, New Mexico has nearly exhausted operating reserves and is facing a $67 million general fund shortfall. The governor's plan would hold spending nearly flat at $6 billion next year. The proposal calls for reserves to be replenished by sweeping funds from idle public accounts — including $120 million from public school district reserves.