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          Front Page


Saturday, March 8, 2003

Plan Would Increase Tax on Cigarettes

By Barry Massey
The Associated Press
    SANTA FE The state tax on cigarettes would increase by 70 cents a package under a Senate proposal to finance state programs and health care, from Medicaid to a hospital expansion at the University of New Mexico.
    The proposal under consideration by the Senate Finance Committee would generate nearly $47 million a year, with about $13 million going to cover the rising costs of Medicaid. The program provides health care to low-income and disabled New Mexicans.
    The measure was developed to provide additional money to cover spending in the state budget and help in reaching an agreement between the Legislature and Gov. Bill Richardson over the use of tobacco settlement revenues.
    Nearly $13 million annually from the tax increase would help back bonds to finance an expansion of the UNM Health Sciences Center and its cancer research center. The measure provides for up to $80 million in bonds from the New Mexico Finance Authority.
    Under the proposal, the state tax would increase from 21 cents a package to 91 cents.
    The national average tax rate is 64 cents a package.
    At a committee hearing Friday, tobacco industry representatives opposed the tax increase.