SANTA FE – New Mexico Gov. Susana Martinez provided new indications Tuesday that the state may be headed toward a special legislative session to address dwindling state operating reserves.

The Republican governor told members of the State Investment Council that her office has been working for weeks with executive agencies and a key legislative committee on how to resolve the state’s fiscal imbalance.

New Mexico is one of several states dealing with general fund declines linked to reduced energy prices and production. Where some states have tapped rainy-day funds or raised taxes, New Mexico has allowed its operating reserves to plunge.

Martinez said a solution may involve a short, pre-negotiated legislative session, without indicating exactly how the state would meet spending commitments.

Sen. John Arthur Smith, chairman of Legislative Finance Committee that drafts the state budget, last week warned that anywhere from $300 million to a half-billion dollars in projected state revenue could fail to materialize. The Democrat from Deming urged the governor to plan for a special legislative session as soon as possible and not wait until the next regular session in January.

Martinez has resisted calls to consider tax increases from Democratic lawmakers and Republicans, including from State Land Commissioner Aubrey Dunn.