House passes bill to cut grocery taxes, raise cigarette taxes

Published 9:02 pm Friday, February 16, 2007

Political pressure to increase the tax on cigarettes now moves to the Senate after the Mississippi House approved a bill to raise the levy on a pack of smokes from 18 cents to $1 a pack and to slash taxes on groceries.

The House voted 91-27 for the bill Thursday. The higher tax on cigarettes and lower sales tax on groceries — from 7 percent to 3-1/2 percent — would take effect July 1.

Mississippi has one of the highest grocery taxes in the nation, and one of the lowest tax rates on cigarettes.

Sign up for our daily email newsletter

Get the latest news sent to your inbox

The bill’s future in the Senate is uncertain. Lt. Gov. Amy Tuck supports the bill. Gov. Haley Barbour, who vetoed a similar bill last year, does not. Tuck and Barbour are Republicans.

Barbour spokesman Pete Smith said Thursday the governor had no comment on the House vote.

Sen. Tommy Robertson, R-Moss Point, chairman of the Senate Finance Committee, has said he is reluctant to put the Senate through another debate on the proposal. One the reasons he cited was the political fallout that could befall lawmakers in both parties because of how they might vote.

Mississippi Democratic Party Chairman Wayne Dowdy said Thursday that Robertson should put the bill before the Senate.

“But with Sen. Robertson closely aligned with Republican Gov. Haley Barbour, anyone can see where this issue may be headed,” Dowdy said.

The Senate’s version of the cigarette bill faces a Wednesday deadline for passage. If Robertson’s committee doesn’t act on it, then the House proposal would be the only measure still alive in the 2007 Legislature.

During the House debate, Ways and Means Committee Chairman Percy Watson, D-Hattiesburg, argued that lowering the taxes on food items would help all Mississippians while raising the price of cigarettes would deter young people from smoking.

“What we need to do is give that broad-base tax relief,” Watson said during debate on the bill. “There’s not a household in this state that wouldn’t benefit from this.”

Some lawmakers were concerned the so-called tax swap could hurt small towns that depend on sales taxes for the bulk of their revenue. Cities receive part of the sales taxes collected within their boundaries, and some mayors have criticized the bill because they feared it would hurt local budgets.

“I represent a small city and the concern of the people who run that city is they’ll have to increase tax revenue,” said Rep. Mike Lott, R-Petal. “Do we have some kind of guarantee in this legislation that if they are not made whole that we are going to do that from another source?”

“They will be made whole,” Watson said, adding that the tax cut wouldn’t apply to nonfood items and the cities would get a larger share of revenue even though the tax rate would be lower under the bill.

“Whether you’re taking about Coldwater, Miss., or Hot Coffee, Miss., this bill is not going to adversely effect municipalities,” Watson said.

Rep. Greg Snowden, R-Meridian, urged his colleagues to support an amendment that would have stripped the cigarette tax from the bill, reasoning that a simple tax reduction on groceries would stand a better chance of surviving.

“We know what’s going to be the fate of this bill if it’s tied together. You know as well as I do, this combined version is DOA at the end of the hall,” Snowden said, referring to the Senate.

Snowden’s amendment was defeated.

The bill is House Bill 247.