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Wednesday, March 24, 2010

Gov. Bill Richardson Vetoes Food Tax; Signs Cigarette Tax and Budget Bill

Governor Bill Richardson vetoed the food tax today in the final legislative action of his two terms as governor.

“I am not willing to put this burden on working families in the form of an unfair tax on food. I agree with those who call this a cruel tax,” Governor Richardson said in a statement released by his office. “It is especially cruel during the worst financial crisis New Mexico has ever experienced."

Governor Richardson explained that he made good on a campaign promise when he led the charge in 2004 to eliminate the tax on food. The Senate insisted on including a partial reinstatement of the food tax as part of a larger revenue bill passed during the recent special session. Governor Richardson signed the revenue package, but line-item vetoed the tax on food.

“In 2004, I told New Mexicans that we eliminated the food tax forever, putting hundreds of dollars into the pockets of working families,” Governor Richardson said. “I’m not about to open the door again and resurrect a tax on food that disproportionately hurts poor and middle-income families. There is no reason to tax so basic a necessity as food in order to balance the budget.”

In addition to his action on the revenue bill (Senate Bill 10) Governor Richardson also signed two other pieces of the budget-balancing package passed during the special session.

Budget (House Bill 2) – Governor Richardson signed the budget bill, which includes language that gives the Governor the authority to make additional spending cuts across state government. The Governor will exercise that option if cash reserves decline as a result of the food tax veto. The Governor is also prepared to use $20 million in stimulus money to balance the budget.

Cigarette Tax (House Bill 3) – Governor Richardson signed a bill that increases the tax on cigarettes by 75 cents per pack. Because the bill was intended to raise revenue to balance the budget, the Governor vetoed earmarks that would have diverted $13.3 million from the tax for other purposes. The veto means the money will go to the General Fund, to help bolster reserves. The Governor also vetoed language that would have ended the tax after four years. Because the tax is meant to deter young people from smoking, the sunset provision is not necessary.

We understand the Governor also vetoed $5.3 million in tax rebates for low-income families and $11 million for early childhood programs.

March 24, 2010 at 12:34 PM in Economy, Populism, Food and Drink, Gov. Bill Richardson, NM Legislature Special Session 2010, Taxes | Permalink

Comments

Thank you for vetoing the food tax, Guv!

Posted by: Proud Democrat | Mar 24, 2010 1:39:47 PM

Really? How could you VETO money to Early Childhood ...... families and children of NM needed that funding.

Posted by: A. | Mar 24, 2010 10:08:35 PM