The latest estimate of New Mexico’s revenues predicts a $650 million shortfall for fiscal 2010, up from an estimated $433 million in August.

The Department of Finance and Administration said last week that it expects recurring revenues for the current fiscal year to total $4.8 billion, about 12% less than was allocated for public and higher education, and general government administration.

The Legislature is currently meeting in special session to resolve the budget issues.

A budget proposal developed by the chairman of the Legislative Finance Committee includes a 3.5% spending cut that would include public education and a draw down of the budget stabilization fund to 5% from the current 10% of the state budget.

Rep. Luciano “Lucky” Varela, D-Santa Fe, offered the latest plan after Gov. Bill Richardson objected to a legislative proposal to save $46 million by cutting the salaries of state employees, including teachers.

The compromise plan does not include salary reductions.

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