The New Mexico Legislature has just begun a Special Session to address your state’s $600 million budget deficit.  Unfortunately, instead of looking for ways to cut spending, legislators are weighing a variety of tax increase proposals, including raising the gross receipts tax on goods and services by 0.25 percent, reinstating the tax on food, and boosting the excise tax on cigarettes by up to 75 cents per pack.

With New Mexico, like the rest of the country, still facing one of the toughest economies in decades, raising taxes will further burden already cash-strapped families and discourage economic activity at a time when policymakers should be enacting measures to promote economic growth!

What’s more, while cigarette tax increases have proven politically popular across the country, time and again history has shown that raising excise taxes does not produce projected revenue.  Of the 57 excise tax increases that states implemented between 2003 and 2007, only 16 met or exceeded revenue targets.  As just one example, when New Jersey increased its cigarette tax in 2006, instead of gaining a projected $30 million in revenue, the state lost more than $22 million!

When the expected tobacco tax revenue fails to materialize, the politicians in Santa Fe will end up increasing yet more of your taxes to make up the shortfall.

In addition, taxes on food and cigarettes are regressive, disproportionately impacting the poor and those living on fixed incomes.  With millions of New Mexicans still struggling to make ends meet, no taxpayer -- particularly not those most disadvantaged -- should be forced to hand over more of his or her hard-earned money to the government.

Citizens Against Government Waste and the Rio Grande Foundation identified millions of dollars in inefficient and extravagant programs in the 2008 New Mexico Piglet Book, including $1.67 million to expand and renovate the New Mexico Farm and Ranch Heritage Museum and $500,000 to plan and construct a rail spur and platform at Balloon Fiesta Park in Albuquerque.  To balance the budget, Governor Richardson and your state legislators should follow the example of households across the country in these tough economic times by eliminating such wasteful and non-essential spending.