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SANTA FE — There are troublesome clouds looming on New Mexico’s financial horizon and if the problems continue to grow it could mean another round of budget cuts.
Revenue collections for the current budget year are running $76 million below what had been anticipated, according to the Legislative Finance Committee.
That spells potential trouble for public schools, colleges, courts and state agencies, although it could be July or August before it’s clear whether weak revenues force more budget reductions.
If revenues fall short for the fiscal year ending in June, then New Mexico’s cash reserves must make up the difference to balance the budget.
Those reserves are the state’s financial safety net.
Gov. Bill Richardson and legislators are relying on that money to avoid more spending cuts in the upcoming 2011 fiscal year.
That’s particularly true after Richardson vetoed a proposed tax on food last month, which would have raised $68 million to help balance next year’s budget. The Democratic governor signed other tax increases that will generate more than $170 million next year.
“I believe we can eliminate the food tax and still balance the budget,” Richardson said in explaining his decision.
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