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Cigarette tax bill dies under deadline

Senate Public Health Committee Chairman Hob Bryan allowed a cigarette tax bill to die in his committee Tuesday, saying he supports the measure but it couldn’t be implemented this year.

Tuesday was the deadline for committees to take up bills originating in the opposite chamber. The cigarette tax bill was introduced in the House and passed there before it moved to the Senate.

The bill would have increased the state’s cigarette excise tax by $1 per pack. Mississippi now has one of the lowest cigarette excise tax rates in the nation, at 18 cents a pack.

House Medicaid Committee Chairman Dirk Dedeaux, D-Perkinston, has said adding $1 a pack to the cigarette tax would generate about $174 million a year. He said the majority of that money would be earmarked for Medicaid, which is facing an $87 million deficit this fiscal year.

Bryan, D-Amory, reminded his committee Tuesday that Republican Gov. Haley Barbour has said he would veto any tax bill. Barbour — a former tobacco lobbyist — vetoed tax swap legislation in 2006 and 2007 that would have raised the cigarette tax and reduced the state’s grocery tax.

The governor has appointed a special committee to study the state’s tax structure with the goal of recommending some type of tax cuts. He repeatedly has said Mississippi’s tax system shouldn’t be altered in any way until the commission completes its study this year.

“I support that tax,” Bryan told his committee members. However, “I believe it will be better to take it up in another year.”

Medicaid spokesman Francis Rullan said Tuesday that the program has enough money to operate through the legislative session, which is scheduled to end on April 19. The program has requested an additional $168 million in funding for next fiscal year, which begins July 1.

“We are confident the Legislature will do what is necessary to fund Medicaid at an appropriate level,” Rullan said.

Rullan said Medicaid Executive Director Robert Robinson has been looking at ways to keep the program’s budget balanced. That could mean some service cuts.

“There are no changes as of today,” Rullan said. “There’s no way of predicting exactly when we’re going to run out of money.”

The Mississippi Hospital Association issued a statement that criticized Bryan’s decision to let the cigarette tax bill die.

“We think it’s a shame that the bill never even made it out of committee, as Mississippians deserve to know where their senators stand on this important public health issue. Unfortunately, it has become an issue of right or left instead of right or wrong,” the organization said.

Bryan said he’s hopeful a plan will emerge to generate $90 million for Medicaid before the session ends April 19. The health care program serves about 568,000 of the state’s needy, including children, the elderly and disabled.

Bryan said the negotiations are taking a while because they’re trying to “figure out a way that’s in accordance with federal guidelines and get the money from folks who benefit from it.”

Until a few years ago, some hospitals used to put up $90 million for the program that draws a 3-to-1 match from the federal government.

However, new federal guidelines prevent Mississippi from generating the money as it had in the past. For the last two years, the state has used federal Hurricane Katrina money to plug that, but that funding is no longer available.

Barbour wants to tax hospitals to get the money — a proposal the hospital association has rebuffed.

The hospital association said Medicaid spends $264 million on tobacco-related health care costs.

“It just makes no sense to say you are against a tax on cigarettes (which sends people to our state’s hospitals) to fund the Medicaid program and for a tax that could shut the doors of your local hospital that provides that care when needed,” the group said in its statement.

The bill is House Bill 1013.