Albuquerque Journal, Morgan Petroski, Associated Press
New Mexico Gov. Susana Martinez holds a press conference at Yearout Mechanical Inc. in Albuquerque, Monday, Jan. 17, 2011, to discuss her priorities during the upcoming legislative session.

SANTA FE, N.M. — Republican Gov. Susana Martinez proposes to improve New Mexico's public schools by ending social promotion of students and providing financial incentives for the state's best teachers.

Martinez is to outline a package of educational reforms in her State of the State speech to a joint session of the Legislature, which convened Tuesday.

Financial issues are expected because the state faces a $400 million budget shortfall.

In prepared remarks for her speech to legislators, Martinez said school should be assigned grades, such as A, B, C, D or F, to reflect their performance.

Martinez wants to cut spending on school administration and shift it to classrooms. She said the state must end the practice of allowing failing students to advance to the next grade.