Senate votes to raise tobacco tax

SANTA FE – In a long-shot bid to secure more funds for public schools statewide, the Senate voted 24-16 on Wednesday to approve a proposal that would generate an estimated $89 million annually by nearly doubling New Mexico’s tobacco tax rate.

The measure faces an all-but-certain veto if it passes the House and arrives on Gov. Susana Martinez’s desk, but majority Senate Democrats said the measure would provide an alternative to additional K-12 spending cuts.

“This will not only assist us with some of the (potential) cuts for this year, but it will also help us backfill some of the cuts from previous years,” said Sen. Howie Morales, D-Silver City, sponsor of Senate Bill 231.

If approved, the measure would nearly double the state’s tax on cigarettes, raising it from $1.66 a pack to $3.16 a pack, a $1.50 increase. It would also apply to cigars and electronic cigarettes, or e-cigarettes, although it wasn’t clear how those items would be taxed.

Republican senators expressed opposition to the legislation, with some saying it would hurt cigar shops and other locally owned businesses.

Others questioned the wisdom of increasing the cigarette tax rate for the second time in seven years – a 75-cent hike was part of a 2010 tax package signed into law by then-Gov. Bill Richardson.

“We’re making the poor even poorer than they are right now – unless they quit,” said Sen. Greg Baca, R-Belen.

Meanwhile, Wednesday’s vote on the bill came just one day after the bill cleared a key Senate committee, which also heard testimony from school superintendents statewide about the potential impact of additional spending cuts.

Generally, bills appear on House and Senate calendars for at least one day before votes are taken.

School districts have faced several years of belt-tightening as part of an overall state budget crunch. A solvency package enacted earlier this year by the Legislature and signed by Martinez included a provision that reduced funding for most school districts by a total of $46 million.

Sen. Jacob Candelaria, D-Albuquerque, who described himself as a former smoker, said it was time for the Legislature to take a stand against the governor’s “no tax increase” stance.

“If I still smoked, I’d gladly pay … an extra $1.50 per pack to ensure some of the (budget-cutting) scenarios don’t come to pass,” he said. “We’re running out of options.”

The Senate has already approved a separate tax package that includes a provision to raise New Mexico’s gasoline tax rate, while the House has approved its own tax hike legislation.