In the Init method, where you should be initializing your image. I can expand upon this, but your question seems to acknowledge that you already know how to scale the image.
EDIT: After rereading the question, the answer would be that you need to scale it every time you go into the render method of your gamestate object. This requires that you put graphics.scale(0.5f, 0.5f);
This is required, I believe, because the graphics object resets its scale every game tick so that you don't get a compounded effect as it calls the render method hundreds of times.