State cigarette tax jumps 75 cents on Thursday

By Kevin Wilson: Freedom New Mexico

Not everything in Texas is bigger. The state’s cigarette taxes are less than New Mexico’s as of July 1.
That’s one of several new laws that have taken effect from the state’s 2010 legislative sessions.
Last week, a pack of cigarettes that cost $3.25 before taxes ran a smoker $4.16 after a 91-cent tax.
Now that same pack of cigarettes will be $4.91, as the tax jumps to $1.66 per pack of 20.
Nowhere will the increase be felt more than Clovis, just eight miles from the Texas border.
“I have a lot of people who come from Texas mainly because they’re cheaper (in Clovis),” said Maggie Cheverez, who has been a clerk at Cigarette Express for two years.
Texas’ state tax is currently $1.41. With New Mexico’s current tax rate, Texas smokers who buy in bulk currently save $5 per carton when they visit New Mexico.
As of July 1, a carton of cigarettes in New Mexico is $2.50 more than that same carton in Texas.
Clovis shop owners expect to lose customers to Farwell and Muleshoe merchants.
“All the Texas-jumpers are going to stay home,” Cheverez said. “Why pay more and use your gas to come up this way?”
The increase pushes New Mexico from 31st in the nation to 18th on the cigarette tax scale.
New York ($4.35), Washington ($3.025) and Rhode Island ($3.46) have the highest cigarette taxes.
The lowest cigarette taxes are in Missouri (17 cents), Virginia (30 cents) and Louisiana (36 cents).
“These actions … are a huge victory for the nation’s health that will save many lives and billions of dollars in tobacco-related health care costs,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids. “Higher tobacco taxes continue to be a win-win-win for the states — a health win that reduces smoking and saves lives, a revenue win that helps balance budgets and fund critical programs, and a political win that is popular with voters.”
Cheverez said not everybody sees it as a positive, especially since the smoke shop on 14th and Prince streets is taking a hit from electronic cigarettes.
“There are people who are doing both the e-cigarette and normal cigarettes,” Cheverez said, “but they’re still buying less.”
Other laws taking effect Thursday include:
• A rise in the gross receipts taxes.
The gross receipts in Clovis will increase from 7.4375 percent to 7.5625 percent.
If a person buys a $500 television set Wednesday, current gross receipts taxes will push the total to $537.19. On Thursday, that same purchase is $537.82.
• Creation of the Eastern New Mexico Rural Water Authority (House Bill 15). The authority is responsible for the creation and management of the Ute Water Project.
The project calls for a a pipeline moving water from the Ute Reservoir in Quay County to eight authority members — Clovis, Portales, Texico, Elida, Grady, Melrose and Curry and Roosevelt counties.
Utility authority status would allow the ENMRWA to sue and be sued, issue revenue bonds and use eminent domain for right-of-way issues, among other provisions.
Gayla Brumfield, who chairs the authority, said the board changes from eight members — one for each entity — to seven members.
Now the makeup is three members from Clovis, two from Portales, one from Curry County and another from a rotation of the smaller communities. The move puts more voting clout with Clovis and Portales, which have the largest shares of reserved water.
Officials are now securing funding for the project, and hope to break ground by 2011.
• Allowing concealed guns in certain restaurants (Senate Bill 40). The legislation allows concealed handguns if the restaurant takes in at least 60 percent of its receipts from the sale of food.
Gun restrictions do not apply to law enforcement officials or owners and/or operators of the restaurant.
• A waiver of fishing license fees for certain military members (Senate Bill 193). The bill would allow veterans a fishing license for rehabilitation.
The state’s fiscal impact report notes that the waiver would be available for all military members, New Mexico residents or not, and the impact is estimated at $300,000.