Miss. lawmakers to seek cigarette tax compromise

State News

February 6, 2009

Anonymous The Laurel Leader-Call Fri Feb 06, 2009, 10:55 AM CST

JACKSON (AP) — The spokesman for a national anti-tobacco group said Thursday Mississippi and other states should continue trying to increase their cigarette taxes, even as the federal tax on a pack of smokes is growing significantly in just a few weeks.

President Barack Obama signed a law Wednesday that will add 62 cents to the federal cigarette excise tax, setting it at $1.01 a pack starting March 31.

“The states shouldn’t use this as a reason to slow down talks about tax increases,” Joel Spivak, spokesman for the Campaign for Tobacco-Free Kids, said from Washington.

The revenue from the federal cigarette tax increase is supposed to help pay for an expansion of the State Children’s Health Insurance Program, which covers children in families across the nation that earn too much to qualify for Medicaid.

In Mississippi, lawmakers are working on a cigarette tax increase as a way to bolster the state’s lagging budget. The state’s current tax is 18 cents a pack, the third-lowest in the nation.

The state House and Senate have passed separate versions of a tax bill and are moving closer to negotiations for a final amount. But it’s not clear whether the federal action will change the momentum of talks in Mississippi.

The state House has voted to set the tax at $1 a pack. The Senate has voted to set it at 49 cents, matching the current average for the surrounding states.

On Thursday, the House declined to accept the Senate’s proposal, voting instead to start negotiations between the two chambers.

Gov. Haley Barbour’s position is close to the Senate’s. He proposes adding 24 cents a pack for premium cigarettes and 43 cents a pack on cigarettes produced by companies that didn’t participate in the state’s 1997 settlement of a lawsuit against the tobacco industry. That would set the rates at 42 cents for the higher-prices cigarettes and 61 cents for off-brands.

Barbour spokesman Dan Turner said Thursday that the governor proposed the cigarette tax increase as a way to curb smoking and improve public health, not as a way to generate new revenue. He said the governor wants legislators to be conservative in estimating how much the state might collect, especially since the federal tax might cause a drop in cigarette sales.

“The cautionary tale of this is not to think you are going to get a ton of money,” Turner said. “This (federal) price increase plus the state’s tax — we’re not sure what that will do to revenue.”

Some Mississippi lawmakers say they don’t want to dip too deeply into smokers’ wallets. Others say the state spends millions of dollars a year to treat sick smokers.

Legislators in 17 states are considering tax increases for cigarettes or other tobacco products this year, according to the Campaign for Tobacco-Free Kids. The group estimates Mississippi would see a 13.9 percent decrease in youth smoking if the state cigarette excise tax were $1 a pack.

The Arkansas House on Thursday passed a bill that would nearly double that state’s cigarette tax, adding 56 cents a pack to the 59 cents already charged. The Arkansas proposal also would increase taxes on chewing tobacco — a feature not under consideration this year in Mississippi.

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