New Mexico Gov. Bill Richardson last week vetoed a partial re-imposition of the state sales tax on groceries, while signing budget bills that are expected to generate $170 million a year in new tax revenue.
Richardson said the measure, which would have raised $68 million a year, was an “unfair tax.”
The governor signed the budget bill for fiscal 2011 that allocates $5.6 billion for public education and other government programs, down about $100 million from fiscal 2010.
Richardson was elected in 2004 on a pledge to eliminate local grocery taxes, which were removed by the Legislature in 2005. The state agreed to reimburse local governments for their lost revenue.
However, earlier this year lawmakers approved a budget plan that included the revival of the local food taxes and eliminated the reimbursement program.
Richardson said at a news conference announcing the veto that he considers the removal of the tax in 2005 as one of his major successes 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. “It is especially cruel during the worst financial crisis New Mexico has ever experienced.”
Richardson said if necessary he would rely on $20 million in federal stimulus funds and the state surplus, which is expected to total $272 million at the end of fiscal 2010, to replace the revenue lost through his veto of the grocery tax.
“There is no reason to tax so basic a necessity as food in order to balance the budget,” he said.
Richardson, a Democrat, cannot seek re-election in November due to term limitations.