House Panel Approves Budget Without Cigarette Tax

New Mexico – The Legislature is back at work with a politically difficult assignment of raising taxes and cutting spending to balance the state budget next year.

A House committee approved a $5.6 billion budget bill on Monday. It will reduce spending by nearly 2 percent from amounts provided for government operations in the current fiscal year.

A proposal to raise the tax on cigarettes by 75 cents a pack stalled in a House committee, illustrating the problems confronting Democratic leaders in lining up enough votes for a budget-balancing package.

Democratic leaders negotiated a financial package with more than $200 million in tax increases, including a quarter-cent increase in the gross receipts tax.

The budget bill heads to the House for consideration.

Copyright 2010 The Associated Press.