Earlier today Governor Richardson signed the revenue bills that we pushed for all session, except for the food tax. He plans to use $20 million in stimulus money, $5 million in lower-income tax credit, $13 million in earmark in the cigarette tax, and reserves to fill the gap. If he can not reach the $68 million with everything listed above he will use the authority granted to him by the legislature to make additional cuts to state agencies.
I want to thank all of you that took time to make calls and write emails this last session. We were faced with an extremely hard up-hill battle to raise enough revenue to save jobs and protect services. Even though we did not get the entire $240 million in revenue, we still were able to raise $170 million in new revenue and hopefully the governor will be able to fill the $68 million gap left from the veto on the food tax.
Even though this session is over, the fight to protect jobs and save vital services is not. There is always a chance we will be called back into a special session to address the problems.
Below is an article with his plan. --Josh and Carter
By Trip Jennings 3/24/10 11:51 AM
Gov. Bill Richardson vetoed a controversial food tax Wednesday after an all-out campaign by advocates who said it would harm low-income and middle-class New Mexicans.
The governor said he would make up the $68 million the food tax would have generated by using $20 million in stimulus money, vetoing a $5 million low-income tax credit, eliminating $13 million earmark in the cigarette tax and pulling the rest from the state’s reserves. If the reserves don’t hold up, Richardson said, he would use an authority just granted to him by the Legislature and make cuts to state agencies.
The provision would have automatically re-imposed a gross receipts tax on food in the state’s municipalities.
Richardson used his line-item veto authority to cancel the provision. The veto cancels $68 million in revenue the state was counting to help close next year’s projected budgetary shortfall of several hundred million dollars.
The food tax would have reapplied local and county gross receipts taxes on food, which average about 2 percent across the state, while clawing back annual state payments to local governments. Those payments were made to compensate for the annual loss of revenue caused by the repeal of the food tax in 2005.
