Richardson vetoes food tax

In cigarette tax increase bill, governor also vetoes sunset provision and earmark for education

Gov. Bill Richardson vetoed the food tax today in what a news release from his office called “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,” Richardson said in the release. “It is especially cruel during the worst financial crisis New Mexico has ever experienced.”

With the veto, Richardson “made good on a campaign promise when he led the charge in 2004 to eliminate the tax on food,” the release states. While line-item vetoing the food tax, Richardson signed the larger revenue package into law.

The veto leaves a gap of an estimated $68 million in the budget, but Richardson said he would use $20 million in federal stimulus money and, if necessary, the authority the Legislature gave him to impose spending cuts across state government to plug that hole.

“In 2004, I told New Mexicans that we eliminated the food tax forever, putting hundreds of dollars into the pockets of working families,” 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.”

In addition to signing the revenue-raising bill, Senate Bill 10, Richardson signed two other pieces of the budget-balancing package:

• House Bill 2, the budget bill which, according to the release from Richardson, “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 release states. “The governor is also prepared to use $20 million in stimulus money to balance the budget.”

• House Bill 3, which increases the tax on cigarettes by 75 cents a pack. Richardson vetoed a provision in the bill that would have diverted some of that funding to education, saying in the release that the “bill was intended to raise revenue to balance the budget.”

“The governor also vetoed language that would have ended the tax after four years,” Richardson’s release states. “Because the tax is meant to deter young from smoking, the sunset provision is not necessary.”

Lt. Gov. Diane Denish, who first announced her opposition to the food tax in December, applauded Richardson’s veto of the food tax.

“As I’ve said from day one, the Legislature should have done everything possible to cut costs and make government more efficient before even considering regressive taxes that target working families,” the Democrats’ gubernatorial candidate said in a release. “Unfortunately, that didn’t happen.”

Other gubernatorial candidates didn’t immediately release statements following Richardson’s action.