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Panel proposes salary cuts

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Two percent reduction could help balance the budget

By Barry Massey

SANTA FE — Salaries of state workers and educators would be reduced by 2 percent next year under a budget proposal that also could require $200 million in tax increases or further spending cuts.

The Legislative Finance Committee recommended Monday the state spend about $5.4 billion next year on public schools, higher education and government programs ranging from prisons to health care for the needy.

Those expenditures would be covered by state revenue and $118 million in federal economic stimulus aid.

The proposal represents a reduction of almost 5 percent, or $278 million, from the state and federal money being spent in the current fiscal year ending in June.

The recommendations are meant to serve as a starting point for lawmakers as they put together next year’s budget in the 30-day legislative session starting Jan. 19.

In a departure from its traditional practice, the committee left undecided how lawmakers should balance the proposed budget. The committee’s recommended spending is about $200 million higher than the revenue forecast for next year.

The deficit could be closed with tax increase or additional spending cuts. In addition, the state might get extra federal aid next year.