Mississippi editorial: Taxing issues facing Mississippi legislature

Editorials

January 15, 2007

From the Northeast (Tupelo) Mississippi Daily Journal The Laurel Leader-Call Mon Jan 15, 2007, 09:23 AM CST

An expected proposal to lower Mississippi’s highest-in-the-nation sales tax on groceries and raise its third-lowest-in-the-nation tax on cigarettes should receive full and serious consideration from the Legislature, but within the context of fiscal integrity and other pressing needs.

Lt. Gov. Amy Tuck had the right ideas in principle in 2006 when she became the chief supporter of reforming the two taxes.

We also believe that House Public Health Committee Chairman Steve Holland’s idea to separate a higher cigarette tax from a lower grocery tax could be a reasonable alternative approach to both issues.

Medical evidence that smoking directly causes a bewildering array of potentially fatal and/or chronic illnesses justifies a financial disincentive to tobacco use, especially cigarette smoking. An increase from the 18 cents Mississippi taxes each pack of cigarettes could be applied in various ways, including covering the state’s cost for treating smoking-induced illness among Medicaid recipients and others who receive state assistance.

The 7 percent tax on groceries significantly increases the cost of a necessity — food — for virtually every Mississippian. In the 2006 session, one proposal would have phased-in total elimination of the grocery tax, while a second would have halved it to 3.5 percent. That may be too low in the context of budget integrity.

Whatever figure is agreed on must maintain the state’s ability — in a year of exceptionally strong revenue projections — to fully fund essentials like public education and significantly increase support for universities and community colleges, to name only three issues. It should also be revenue-neutral for municipalities, which rely heavily on the portion of state sales tax rebated to the towns and cities where it is collected.

Discussions have started in earnest among legislators about both a grocery tax cut and a cigarette tax increase. Final decisions likely will not be made until much later in the session, after the necessary proposals and counter-proposals have worked their way through the process in both chambers. Legislators reached agreement in 2006, but Gov. Barbour vetoed the package twice and withstood override attempts.

Separating a tobacco tax increase from a grocery tax reduction could produce a different and more successful dynamic.

— Northeast (Tupelo) Mississippi Daily Journal

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