Mix 1/4 cup sugar and 1/2 tsp. cinnamon in a small bowl; reserve for rolling.

In a separate bowl, combine flour, nutmeg, ginger, baking soda, and remaining cinnamon.

In a large bowl, beat cream cheese, butter, remaining sugar, and vanilla with an electric mixer until blended.

Gradually add the flour mixture to the cream cheese mixture, beating well after each addition.

Refrigerate the dough for 30 minutes.

Preheat oven to 350°F (175°C).

Shape the dough into 42 (1-inch) balls.

Roll each ball in the reserved sugar-cinnamon mixture.

Place the cookies, 4 inches apart, on baking sheets.

Flatten each cookie to 1/4-inch thickness using the bottom of a glass dipped in the remaining sugar mixture.

Bake for 10 to 12 minutes, or until edges are lightly browned.

Cool on the baking sheet for 1 minute.

Transfer cookies to wire racks to cool completely.