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SANTA FE, N.M. (AP) — An international credit rating agency says New Mexico's unfunded pension obligations to public employees continue to cast a shadow over government finances.

Moody's Investor Service on Thursday said that a general fund budget plan recently signed by the governor improves the financial health of public schools and community colleges.

Annual state spending on public education is set to increase by a half-billion dollars.

Moody's says pension reforms this year did not increase contributions by enough to reduce the problem of unfunded financial liabilities. Employer pension contributions rise by 0.25% starting July 1.

Education Retirement Board Executive Director Jan Goodwin disagrees with the negative assessment. She cites a new law that delays the rapid accrual of pension benefits for future educational workers until they surpass 20 years of service.

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