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State funding for public education in New Mexico is almost certain to be reduced further next year to offset plunging state revenues, the chairman of an influential state budget committee announced Thursday.

Democratic Sen. John Arthur Smith, chairman of the Legislative Finance Committee that drafts the state budget, said lawmakers will be hard-pressed to leave out cuts to public schools as they work to reduce deficits linked to a downturn in the oil and natural gas sectors.

“We’re not going to be able to hold the education people whole,” said Smith, as the Public Education Department presented a funding request for the coming fiscal year. “Some of that hide is going to have to come out of education.”

His comments came as Public Education Secretary Hanna Skandera urged lawmakers to maintain general fund spending for public education next fiscal year, after spending for the current fiscal year was cut by 2.5 percent in October. The administration of Republican Gov. Susana Martinez has proposed tapping into cash balances at school districts to provide the state with an additional $120 million next year.

Public education accounts for 43 percent of state general fund spending, the single largest destination for state dollars. New Mexico’s oil-dependent economy is reeling from a downturn in energy markets. Earlier this week, state economists said New Mexico was expected to collect far less revenue than previously forecast this year and next thanks to lagging economic growth, employment and wages.

Skandera proposed a $2.6 billion education budget that would preserve direct, per-student funding to school districts. The proposal would also maintain funding to early childhood education, including prekindergarten spending and a program that extends school hours for about 20,000 struggling students across the state.

At the same time, she suggested $4.5 million in cuts to initiatives designed to improve the performance of teachers and principals, to combat truancy and dropouts, and to support higher math instruction standards.

Lawmakers indicated they will to take up legislation designed to save education dollars by placing a moratorium on new charter schools, reducing the extra funding allowance to small schools and possibly merging school districts. A 60-day legislative session begins in mid-January.

Skandera said a moratorium on charter schools would discourage needed innovation. She said she supports reforms aimed at better governance and efficiency at charter schools. State economists say current spending levels are likely to eat through all the state’s reserve funds by June, and require another $69 million if changes are not made.