NM Senate Approves Budget

New Mexico – With time running out in the Legislature, the Senate has approved a $5.5 billion state budget that's balanced by reinstating New Mexico's sales tax on certain foods and increasing the cigarette tax.

The food tax generates $138 million. A wide range of food products will be taxed, including white flour tortillas, candy and soft drinks.

New Mexico lifted the tax on food in 2005. The Senate proposal narrows the definition of food. The bill passed 23-19 late Saturday. It goes to the House where it faces strong opposition.

The Senate also approved a $1-a-pack increase in the cigarette tax. That raises $33 million.

The House and Senate need to agree on a compromise budget package before lawmakers adjourn on Thursday.

Copyright 2010 The Associated Press.