Gov. Bill Richardson and legislative leaders have agreed to a one-day special session on the budget in October.
Before then, a legislative-executive group will "negotiate a bipartisan agreement on the budget before a special session is convened."
"We are fortunate that New Mexico – with healthy cash reserves – is in much better shape than most states, which have resorted to laying off state employees and drastically cutting services," Richardson said in a statement. "But we are definitely facing tough challenges, and we must continue to make sacrifices to balance the budget."
Some lawmakers have predicted the state this year is facing a shortfall of between $300 and $400 million. They already cut $500 million earlier this year. Others are fretting about the state of New Mexico's reserves.
Given how tricky it is to cut anything substantial from the budget, anyone taking bets on how long the one-day session will really last?