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The Latest: Legislature Approves Internet Sales Tax

SANTA FE, N.M. (AP) — The Latest on efforts by New Mexico lawmakers to resolve a state budget crisis (all times local):

2:10 p.m.

A bill that would impose new taxes on online retail sales and nonprofit hospitals in New Mexico has been approved by the Legislature for consideration by the governor.

The state House and Senate gave their final approval Thursday to the budget-balancing measures. It was unclear whether Republican Gov. Susana Martinez would sign the bill.

The legislation also would create a new state rainy day fund from oil and natural gas proceeds for use during future fiscal emergencies, and suspend contributions to a legislative retirement account to conserve state funds.

Without revenue increases, New Mexico won't have enough money to restore higher education funding that was vetoed by Gov. Susana Martinez last month. General fund dollars for the Legislature as well as state colleges, universities and specialty schools are scheduled to run out July 1.

Lawmakers are grappling with a downturn in tax revenue linked to energy prices and a weak economy.

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12:10 p.m.

A proposal to overhaul New Mexico's sales tax has been blocked by Democratic lawmakers and will not be voted on during a special legislative session.

A House panel on Thursday voted 6-5 along party lines to end consideration of the Republican-backed bill to do away with a variety of tax breaks and lower overall tax rates.

Without the reforms, New Mexico Gov. Susana Martinez has indicated she will not approve any other tax revenue increases. Democratic lawmakers say the tax reforms were drawn up hastily and could undermine state revenues without further study.

Lawmakers are grappling over how to end a budget crisis linked to a downturn in oil prices and a weak local economy.

Martinez last month rejected a variety of tax hikes, while vetoing $765 million in state spending for the fiscal year beginning July 1.

The Democratic-led Legislature has approved bills to restore that funding to state universities and the legislative branch, using money from severance tax bonds to fill a budget shortfall. Many lawmakers say additional tax revenue increases are needed.

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10:50 a.m.

Republicans in the New Mexico Legislature are not giving up on an ambitious proposal to reform the state's gross receipts tax on sales and business services.

GOP Rep. Jason Harper of Rio Rancho presented legislation Thursday that would do away with a variety of tax breaks to bring in sales tax revenue from more sources — at a lower overall sales tax rate.

State budget analysts warn the bill would have unpredictable impacts on state tax revenues as lawmakers grapple with a state budget crisis.

Republican Gov. Susana Martinez has indicated she will not approve isolated tax increases without the broader tax reforms.

Democratic House Speaker Brian Egolf says the tax reform bill will not be voted on during a special legislative session because it was presented too late. Many lawmakers want to set aside money for an independent study of the sales tax reforms in the coming months.

Lawmakers began a special session Wednesday and are grappling over how to end a budget crisis linked to a downtown in oil prices and a weak local economy.

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8:00 a.m.

New Mexico lawmakers are pressuring GOP Gov. Susana Martinez to restore funding to state universities and the Legislature as they look for new sources of revenue during a special legislative session.

Lawmakers were gathering Thursday for the second day of the session to consider bills that would increase tax income to help restore $765 million in funding that was vetoed by the governor.

The Democratic-led Legislature sent bills to the governor Wednesday that would reinstate a $6.1 billion state spending plan for the coming fiscal year, while bolstering state finances by suspending infrastructure projects and tapping severance bonds.

Lawmakers are outlining additional tax increases and plans for a new rainy day fund to protect the state's credit rating.

Martinez has indicated a willingness to increase revenues by eliminating tax breaks.