ANGEL FIRE, N.M. (AP) ¿ Social services advocates and a labor union representing government workers are urging New Mexico legislators to consider raising taxes to help solve a looming state budget deficit.

Bill Jordan, policy director of New Mexico Voices for Children, told the Legislative Finance Committee on Thursday that lawmakers should not rely exclusively on spending cuts to fix budget problems. That will hurt public education and services for the needy who are struggling during the recession, he said.

Jordan's comments came a day before lawmakers receive a new financial forecast expected to show that revenues will be more than $400 million below what had been anticipated in the current fiscal year.

Legislators will meet in a special session this fall, probably in October, to balance the budget. Among the options for lawmakers are spending cuts, tax increases and scrapping previously approved capital improvement projects.

Several committee members said it's unlikely that tax increases will be considered during the special session. However, they said lawmakers could be forced to look at raising revenues in the future because New Mexico's budget problems likely will continue into the 2011 and 2012 fiscal years unless the economy rebounds dramatically. The current 2010 budget year started in July.

"I can assure you, by 2012 we will have to do something drastic," said Rep. Luciano "Lucky" Varela, D-Santa Fe, the committee chairman.

Jordan said lawmakers should look at rolling back some tax cuts that were enacted during the past six years, including capital gains reductions that disproportionately benefit upper-income taxpayers.

"The choice is simply either we can preserve tax cuts for the wealthy or we can preserve education and health care," said Jordan.

A labor union representing government workers, the American Federation of State, County and Municipal Employees, is lobbying lawmakers to look at tax proposals rather than furloughing or laying off public employees.

The union and Jordan's organization, which advocates for programs that help children and lower income New Mexicans, suggest that lawmakers consider several tax proposals, including revamping how multistate corporations pay income taxes, higher taxes on cigarettes and alcohol and a surcharge on upper-income taxpayers such as those earning more than $150,000 a year.

Gov. Bill Richardson objects to repealing personal income tax cuts enacted in 2003. Lowering the state's tax rates has helped in recruiting businesses with high-paying jobs, according to the governor.
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