Forecast: NM Short $650M

New Mexico – A new revenue forecast shows New Mexico facing a $650 million budget shortfall, which lawmakers will try to solve in a special legislative session starting this weekend.

The gloomy financial report by government economists confirms recent speculation by legislative budget leaders that New Mexico's revenues have continued to weaken because of the recession.

In August, the state's revenue shortfall was projected at $433 million. According to the latest estimates, the state needs to plug a $650 million hole in this year's $5.5 billion budget.

Gov. Bill Richardson and lawmakers remain at odds how to balance the budget. Richardson objects to legislative proposals to cut spending on public schools as part of the budget fix. The Legislature convenes Saturday.

Copyright 2009 The Associated Press.