SANTA FE — Some state lawmakers want to add a cent to the state’s gross receipts tax to beef up public school funding statewide.

The tax increase, which was proposed Wednesday during a legislative hearing at the state Capitol, would generate $500 million a year. The money would go toward equalizing the amount of funding each of New Mexico’s 89 public school districts gets from the state, said Rep. Mimi Stewart, D-Albuquerque, who sits on the Legislative Education Study Committee, where the proposal was made.

Under the proposal, $1 would be added to every $100 purchase of most goods and services.

Bad economic times shouldn’t scare off state lawmakers from backing the tax increase, said Sen. Cynthia Nava, D-Las Cruces. Nava is superintendent of the Gadsden School District and, like Stewart, sits on the legislative education committee.

“It’s the perfect time” to do this, Nava said. “If we don’t invest in education, we will remain a poor state.”

The state’s schools generally fare poorly when compared with other states. And this year, all told, 245 of the state’s 770 schools met the Adequate Yearly Progress standard set out under the federal No Child Left Behind Act, compared to 368 schools last year, according to the state Public Education Department.

Both Nava and Stewart said school districts across the state faced severe belt-tightening measures, including layoffs, if the extra funding didn’t pass.

But the lawmakers made clear that the $500 million was for more than helping out financially strapped school districts. The extra money would help pay for a new funding formula that would go a long way toward ensuring that school districts are funded equitably. For example, a district with a large population of low-income children would receive more money under the new formula.

Sen. Vernon Asbill, R-Carlsbad, said he supported the proposed tax increase, but with two stipulations: that the state’s voters be asked to approve the tax at a referendum; and that the revenues from the tax go for educational funding and nothing else.

“I think the vast majority of people in New Mexico will support 1 cent for education,” Asbill said.

But the tax proposal likely will run into opposition during the 2009 legislative session because the state is struggling to close a budget shortfall estimated by some to be as large as $500 million.

“It’s not a good time to increase taxes,” said Sen. John Arthur Smith, D-Deming, who is chairman of the Senate Finance Committee. “Do you make the people who are losing their jobs pay more?”