SANTA FE — New Mexico's budget problems are renewing calls for a repeal of the state's return-to-work law that permits the practice of "double dipping."

Lt. Gov. Diane Denish said Wednesday that she supports putting an end to double dipping, which allows public-sector workers eligible for retirement to briefly step down, then return to a government job while simultaneously collecting pension benefits.

Public employee union leaders also oppose double dipping and claim the practice is a drain on the state's general fund.

Lawmakers approved a bill during this year's regular legislative session that would have placed strict limitations on the law that allows double dipping, but Gov. Bill Richardson vetoed the measure after legal questions were raised.

Carter Bundy, the political and legislative director for the American Federation of State, County and Municipal Employees union in New Mexico, said he now favors reaching even further.

"I think we should get rid of double dipping altogether," Bundy said. "I think we're going to see the Legislature come back next year or in the following year and do just that."

About 2,200 employees across all levels of government in New Mexico were identified earlier this year as double dippers.

The state's return-to-work law that allows double dipping was implemented in 2004 as a way to help cities and counties staff hard-to-fill positions with experienced workers.

However, critics say the practice hurts morale by stifling internal promotions. Also, they point out, the government employer pays the returned employees' would-be share of pension contributions, causing state and local governments to spend more money.

Rep. Luciano "Lucky" Varela, D-Santa Fe, who sponsored this year's bill to limit double dipping, said he hopes Denish's call to end double dipping will shed new light on the issue. He said that he was disappointed Richardson vetoed his bill this year but that he isn't planning to introduce another bill for the session that begins in January.

New Mexico faces a projected $650 million deficit, although legislators passed a package of bills during a special session last month aimed at helping plug the budget gap.

Halting double dipping could save the state more than $7 million annually, Denish said.

"It's not fair," she said of the practice. "The state can't afford it."