SANTA FE — New Mexicans would pay more for groceries, cigarettes and other purchases to help balance a $5.6 billion state budget under legislation lawmakers approved Thursday.

They passed the last piece of the tax package, a 75-cents-a-pack increase in the cigarette tax, before heading home on the fourth day of a special session.

The proposed tax increases, which would bolster the budget for the fiscal year beginning July 1, total more than $230 million.

Gov. Bill Richardson called lawmakers into the special session on Monday, after they failed to agree on a budget during the regular 30-day session that ended Feb. 18.

Many legislators chafed at voting for higher taxes, particularly in an election year when all House seats are up for grabs in November.

But leaders of the Democratic majority said it was the best way to avoid deep cuts to schools, public safety and other government services.

"I don't know that anybody thinks it's the silver bullet, or the answer to the problem," said Senate Majority Leader Michael Sanchez, D-Belen.

"But it was something to keep state government running, to keep teachers employed, (to keep) state workers employed without having to go through furloughs or layoffs."

Republicans in both houses resisted the tax hikes, arguing that bloated government should be trimmed instead.

"It boiled down to protecting the public sector at the expense of a very sick private sector," said Senate Republican Whip William Payne of Albuquerque.

Republicans also complained that although Richardson had said he would support temporary tax increases, most of the changes would be permanent.

The governor said in a statement he regretted that tax increases became an option and would study the legislation before deciding whether to sign it.

"I am especially concerned that the Senate insisted on including a food tax, which is regressive and hurts working New Mexico families, as a part of this package," he said.

Richardson has 20 days to sign the budget, tax increases and other bills.

Before they left, legislators also passed two bills that together would provide about $220 million for new capital projects around the state.

The tax increases include a boost in the statewide 5 percent gross receipts tax by one-eighth cent, and a partial reimposition of the tax on food. That would be at local gross receipts tax rates, which average about 2 percent.

The cigarette tax hike would add 75 cents to the existing 91-cent state tax, until 2014. There's already a federal tax, at $1.01.

According to the bill's supporters, the tax increase would raise the average price of a pack of cigarettes from $4.60 to $5.35.

The state is projected to get about $33 million annually from the tax hike. One-third of that would be earmarked for early childhood programs for one year under the legislation. The Children, Youth and Families Department would get $6.4 million and the Public Education Department $4.6 million.

The Senate voted 25-15 for the bill. The House agreed to go along with Senate changes — the House had wanted the $11 million to go to public school operations instead — and the bill went to the governor.

Sen. Dede Feldman, D-Albuquerque, said the higher tax would not only help the budget but result in a decline in smoking by young people and a savings in public health expenditures.

Sen. Kent Cravens, R-Albuquerque, called the cigarette tax increase a "desperate, Hail Mary pass" aimed at shoring up lagging revenues.

"These are Band-Aids, folks," Cravens said, warning there could be continued budget problems if next year's revenue growth projections are overblown.

Opponents of the bill also said the higher tax would foster smuggling.

"This is going to be a crime that pays," Payne said.

The legislation includes a provision under which Indian tribes could charge a 75-cents-per-pack tax on the cigarettes they sell, with the revenue going to tribal governments. That would eliminate the incentive for smokers to avoid the tax by buying on Indian lands.

The capital projects bills passed by the Legislature would:

• Provide nearly $46 million, most of it from severance tax bonds, for capital improvements. Projects include building, repairing and renovating public facilities, fixing dams, and putting infrastructure in the border communities called colonias. The bill (HB5) also contains two items sought by Gov. Bill Richardson: $6 million for expansion of Hewlett-Packard's customer technical support center in Rio Rancho, and $2.5 million for the Fidelity Investments facility in Mesa del Sol. The bill also would reauthorize $33 million in previously approved funding for projects.

• Authorize the issuance of general obligation bonds, subject to voters' approval in November's general election, for about $175 million in capital projects. The projects that would be funded by the bill (SB1) include senior centers, libraries, pre-kindergarten programs, and building improvements on college and university campuses.

Contact Deborah Baker