SANTA FE, N.M. (AP) — New Mexico government analysts are warning that shrinking enrollment and limited funding at many public state colleges and universities may lead to tuition increases that few local students can afford.

A report released Tuesday from staff at the nonpartisan Legislative Finance Committee shows that a shrinking portion of the state budget is being devoted to higher education as enrollment declines.

Lawmakers are being warned of the need for greater efficiencies to avoid tuition and fee increases that threaten college affordability.

The report suggests the state seek greater efficiencies in higher education by allowing colleges to merge and to combine purchases and services.

It recommends allocating a much greater share of state funding based on performance goals. Those goals can reward institutions where students increasingly complete their college degrees and certificates.