I spent several days in New Mexico last week, speaking at the Council of State Governments' western regional meeting and enjoying much of the stunning scenery northern New Mexico has to offer.

The big political news in the state was, not surprisingly, a budget deficit that seemed to be growing practically by the hour. The legislature will meet in special session starting Monday to fill a shortfall estimated at $650 million.

The big fights will come over education spending. Governor Bill Richardson doesn't want to cut public education at all. But K-12 takes up more than 40 percent of New Mexico's budget; coupled with higher ed, education counts for 60 percent of the budget. Legislators are insisting that education can't be taken off the table.

On Friday, about 1,000 people rallied at the capitol in Santa Fe to protest proposed cuts, largely drawn from public employee and teachers unions.

Being in Santa Fe the week Saul Meyer pleaded guilty, it was impossible not to hear talk about what this meant for New Mexico politicos. Meyer is the founding partner of Aldus Equity and a central figure in the pension pay to play investigation led by New York State Attorney General Andrew Cuomo.

Federal prosecutors let it be known that Richardson would not face indictment in the state's pension case just as our September issue went to press, which included my short piece about what the scandal meant for the governor's future. Meyer's remarks prompted further chatter in Santa Fe about the case:

"On numerous occasions...I ensured that Aldus recommended certain proposed investments that were pushed on me by politically-connected individuals in New Mexico. I did this knowing that these politically-connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico."

Finally, the big campaign news was the defeat of three-term Albuquerque Mayor Martin Chavez by state Rep. Richard Berry. Berry resigned his House seat yesterday; his replacement will be chosen by the Bernalillo County GOP committee.

The mayoral election was nominally nonpartisan but Berry is a Republican and last Tuesday's results also gave Republicans a 5-4 majority on the city council.

I hadn't followed this race at all, but I heard some interesting speculation on the radio on election night about whether Chavez had paid too much attention to climate change, sprawl and energy issues at the expense of seeming attuned to job creation and the economy. Albuquerque has lost 14,500 jobs over the past year -- half the losses in the worst year for New Mexico employment since World War II.