Gov. Bill Richardson and legislative leaders on Tuesday agreed to hold a one-day special session — likely in October — to cope with expected state budget shortfalls.

Before lawmakers convene in Santa Fe, a working group of legislative and executive representatives will try to work out a spending agreement, the Governor's Office announced.

The special session will be limited to the budget. Richardson said he won't consider any other measures.

Although they won't get new revenue projections until Friday, state lawmakers already say the numbers are daunting, with a possible shortfall of between $300 and $400 million for the current fiscal year, and holes to patch on the 2009 fiscal year, which ended June 30.

Some legislators headed to a state Legislative Finance Committee meeting that starts today in Angel Fire said they have some ideas on trimming the budget, including imposing a real freeze on hiring and cracking down on "double dippers," a term for public employees who collect both a retirement check and a government salary.

Sen. Sue Wilson Beffort, a Sandia Park Republican, said the Richardson administration hasn't abided by a hiring freeze declared last fall.

"I feel the administration is not respecting what the governor proclaimed himself and is continuing hiring people who, in any way you look at it, are not essential employees," she said.

Wilson Beffort said new hiring is one of the most obvious places to cut. "Before we look at cutting medical and education and so on, we need to take a look at the nonessential hires," she said.

LFC members including Wilson Beffort will gather for three days to consider the new budget figures and examine the accounts of the Medicaid and the Temporary Assistance to Needy Families programs, among other things.

The hiring freeze implemented last November is also expected to be a hot topic, as some are suggesting the administration hasn't done enough to rein in the state payroll.

Since the freeze was declared, 41 exempt spots had been filled as of early this month. Twenty-six of those were hired by the governor; while 15 have been hired by the Attorney General's Office, the Public Regulation Commission, the Public Schools Facility Authority, the Secretary of State's Office and the State Land Office, according to information provided in response to a public-records request by The New Mexican.

Three people who have left the Governor's Office recently have been replaced. Spokesman Gilbert Gallegos said in an e-mail that the office hasn't replaced other people who have left, including administration spokesman Pahl Shipley, who moved to the state Film Office.

Two of the three replacements were already in positions that were exempt from the state personnel system and serve at the pleasure of the governor, while one transferred in from a classified position and was given a pay raise.

One of the exempt positions is paid through the Department of Finance and Administration, Gallegos said.

Meanwhile, more than 315 classified spots have been filled, mostly in public safety and health positions.

The restriction on hiring is expected to save about $9.6 million in salaries and benefits. About 1,200 positions have been held open since it was implemented.

Each exception to the freeze has required approval by the Department of Finance and Administration and the state Personnel Office.

Another item lawmakers are likely to look at is the price tag for so-called double dippers, state employees who retire and begin collecting benefits but return to work.

Rep. Lucky Varela, D-Santa Fe, this session sponsored a measure that would have cracked down on the practice, but Richardson vetoed it.

Varela said Tuesday he's waiting to see suggestions from a task force set up to look at the issue, but said the idea of revisiting the practice and its impact on the budget isn't off the table.

Among other things, the vetoed bill would have required anyone in the Public Employee Retirement Association pension system to wait 12 months to return to work.

Opponents of the practice say the state can't afford to be paying some retirees large incomes that include a salary and a pension.

While those are two possible areas to cut, lawmakers say all programs should be scrutinized.

"I think everything is on the table," Senate President Pro Tem Tim Jennings said. "It can't be just one thing; it has to be everything. We are looking at some significant cuts."

Wherever they cut, the work that lays ahead for lawmakers will be similar to what they've had to deal with since the economic slump began. Earlier this year, they cut about $450 million from this year's budget to stave off the effects of declining oil and gas revenues and lower gross-receipts and income tax collections, which remain in a slump.

Wilson Beffort said the state needs to get serious about cutting spending, no matter what the revenue projections show.

"The worst thing I think we could do would be to not make systemic changes," she said, "because we could end up taking our reserves down to nothing and that's not a good place to be."

Richardson said in his statement: "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. But we are definitely facing tough challenges, and we must continue to make sacrifices to balance the budget."

Contact Kate Nash at 986-3036 or knash@snewmexican.com. Read her blog at www.greenchilechatter.com.