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SANTA FE, N.M. (AP) — With time running out in the Legislature, the Senate approved a $5.5 billion state budget early Sunday that's balanced by reinstating New Mexico's sales tax on certain foods and increasing the cigarette tax.
The food tax will generate $138 million but it's expected to run into strong opposition in the House.
The Senate voted 23-19 to impose the gross receipts tax on a wide range of food products, including white flour tortillas, hard taco shells, candy and soft drinks.
New Mexico lifted its tax on food in 2005. The Senate proposal narrows the definition of food. It leaves products tax free if they are considered food under the federal Women, Infants and Children program. Supporters said it will encourage New Mexicans to eat healthier foods and could help reduce obesity.
"It is in effect a tax on salt, on sugar, on white flour and prepared foods," said Sen. Dede Feldman, D-Albuquerque.
The Senate approved tax measures to generate more than $180 million to balance next year's budget for public schools, colleges and government programs, including health care for the needy.
The Senate worked past midnight to finish work on the budget, which passed 25-17.
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