It looks as if a "food fight" could be brewing for January's session of the Legislature.

A task force appointed by Gov. Bill Richardson to study raising revenue will consider extending the gross-receipts tax to groceries — just six years after it was repealed.

The issue was discussed briefly Monday at the first meeting of the 42-member task force. It was the only one of more than 30 revenue-raising proposals to generate any heat among the members at the meeting.

Terri Cole, president and CEO of the Albuquerque Chamber of Commerce, told the committee that she'd spoken with food banks and others who distribute food to the poor. "They tell me the tax break hasn't really been that helpful to the very poor," she said. Cole said it might be more helpful to bring back the food tax and have the state directly fund food distributions to the needy.

The food tax repeal costs the state about $200 million a year, Cole said.

However Allen Sanchez, executive director of the New Mexico Conference of Catholic Bishops, which backed the repeal of the food tax, said Catholic charities that distribute food don't agree with Cole's statement that not taxing groceries hasn't helped lower income people.

Fred Nathan, director of Think New Mexico, said it would be "unproductive and cruel" to lower and middle-income families to bring back the tax on "fruits and vegetables." Think New Mexico, a Santa Fe-based think tank was a primary force behind the food-tax repeal.

In 2004, the Legislature passed and the governor signed a bill that eliminated gross-receipts taxes on most groceries and some medical services. To pay for that, the gross receipts tax on most other items was raised.

Backers of the repeal argued that taxing groceries is "regressive" because lower-income groups end up spending a high percentage of their income on food. In 2004, Think New Mexico said the average family of four in New Mexico spent about $225 a year in taxes on groceries.

But Nathan said Monday that he would like to see gross-receipts taxes on some "non-essential" foods such as potato chips, candy and non-diet sodas.

Among the proposals the task force is considering is increasing personal income taxes on higher income New Mexicans — which were slashed at the outset of the Richardson administration.

The proposal submitted by the administration for consideration by the panel would not directly increase the tax rate for the upper brackets, but would impose a 1 percent surcharge. In the various options presented, the minimum annual income to which the surcharge would apply ranged between $100,000 and $500,000.

In 2003, Richardson signed legislation lowering the personal-income tax for the upper bracket from 8.2 percent to 4.9 percent over five years. Jim Nunns, the state's tax-policy director, told the task force that the options he presented could effectively increase the highest bracket tax rate to as high as 7.9 percent.

The task force also is considering proposals to raise or restructure gross receipts and compensating taxes; taxes on tobacco, liquor, insurance premiums, motor vehicles, oil, natural gas, coal and uranium; corporate income taxes; and withholding taxes; The task force also will consider tax compliance and administration rules and rules defining business incentive tax credits.

The task force will make its final report by Dec. 21, about a month before the Legislature starts. The next meeting is 1 p.m. Thursday at the Expo New Mexico in Albuquerque.

Contact Steve Terrell at 986-3037 or sterrell@sfnewmexican.com. Read his political blog at roundhouseroundup.com.

On the Web

• www.nmrevenueoptions.com