Republican Gov. Susana Martinez is proposing tax cuts for businesses and veterans as part of her budget recommendations to the Legislature.
The governor announced her proposals Thursday at a news conference.
Martinez is recommending a $5.6 billion budget that will increase spending by 3.6 percent in the fiscal year starting July 1.
The Legislative Finance Committee has proposed a 4.6 percent budget increase.
The governor proposed at least $55 million in tax cuts, including reducing or eliminating the gross receipt tax on about 40,000 small businesses and changes to lessen the pyramiding of the gross receipts tax on some business transactions.