The governor says there are positive signs in the state economy--growth in tourism, exports, and manufacturing--but the continued loss of government jobs and an ongoing debate about federal spending means New Mexico needs to pick a different path.
"With a federal government that is so far in debt, so dysfunctional, we'd be forced to leave our state economy at the mercy of the next fiscal cliff in Washington," Martinez said.
The governor's speech focused on making New Mexico more competitive with surrounding states.
She's proposing job-creation tax breaks for small businesses and to cut the state's corporate tax rate.
She also wants lawmakers to pass several different education reforms including improving literacy education for elementary school kids.
The governor's continued fight to get rid of driver's licenses for illegal immigrants only got a brief mention.
Democrats responded a short time later saying they'll fight for education reform as well plus raises for state workers, something the governor opposes.
But they emphasized helping the state's economy should come from helping the middle class, not giving businesses a break.
"A comprehensive approach to putting people back to work must focus on the majority of everyday New Mexicans who have not and will not benefit corporate tax breaks or corporate tax loopholes," Senate Majority Leader Michael Sanchez, D-Belen, told reporters.
Another big fight this session is expected to be pension reform, something Democratic leaders say is critical to keeping a promise the state made to its employees.
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New Mexico is located in the southwestern region of the U.S. Inhabited by Native American populations for many centuries, New Mexico has also been part of Imperial Spain, part of Mexico, and a U.S. territory.