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NM Budget Deal: Cig Tax, Other Revenue Options Back on the Table

March 1, 2010

SANTA FE, N.M. - Word from Santa Fe is that lawmakers already have reached a tentative budget deal going into today's special session - and the package of cuts and tax hikes includes some of the more controversial proposals from the regular session, which ended last month without a budget agreement.

One is a higher tax on a pack of cigarettes. Supporters, like Traci Cadigan, government releations director for the American Cancer Society Cancer Action Network in New Mexico, say it would have lasting health benefits for the state.

"It has been proven by the U.S. Surgeon General that this is the best way to deter teens from starting to smoke. The second thing is that it would also prevent 7,000 deaths within New Mexico from tobacco-related illnesses."

Convenience store owners oppose the tax, saying it would lead many of their customers to visit tribally-owned smoke shops and gas stations instead. An amendment to the original bill in the regular session and an agreement with New Mexico's tribes would have addressed the issue by allowing tribes to raise their cigarette taxes, too, Cadigan says.

The proposed cigarette tax would generate more than $30 million for vital programs that face potential cuts, Cadigan points out.

"Like Medicaid, like school-based health care clinics; services to the developmentally disabled and also to education. So this could be a potential huge win for those different facets of the budget as well."

The budget deal is said to also involve an increase in the gross receipts tax and several unspecified budget cuts. Gov. Richardson has said he still plans to call the special session, to begin this afternoon, to address the anticipated budget shortfall of more than half a billion dollars.

Eric Mack, Public News Service - NM