Miss. Senate votes for cig tax of 49 cents a pack

Published 1:33 am Friday, January 30, 2009

The last time Mississippi increased its cigarette tax, Ronald Reagan was president, “Rambo” was on the big screen and Madonna topped the charts with “Like a Virgin.”

An effort to increase the tax gained momentum Thursday as the state Senate voted 42-7 for a bill that would increase the excise tax to 49 cents a pack, matching the current average of the four surrounding states. Mississippi’s tax has been 18 cents a pack since 1985, and it’s now the third-lowest in the nation.

The House voted earlier this month to set the tax at $1 a pack.

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Now, there are two options: The House could accept the Senate proposal and send it to the governor, or the two chambers could start negotiating to reach a compromise amount.

Gov. Haley Barbour supports an increase of 24 cents a pack for premium cigarettes and 43 cents for off-brands. Taxes on cigars and smokeless tobacco would not change under any of the plans being discussed.

Several senators, including Democrat David Blount of Jackson, argued the cigarette tax should be $1 a pack to discourage young people from starting to smoke. He said Mississippi spends hundreds of millions of dollars to treat diseases such as lung cancer and emphysema.

“I think this is a simple issue that is made overly complex because of all the rhetoric that surrounds it,” Blount said.

Sen. Billy Hewes, R-Gulfport, said a $1 tax would “put us at a horrible imbalance with our surrounding states.” He said people from Mississippi might cross state lines to stock up on cartons of cheaper cigarettes, causing this state to lose tax revenue.

Louisiana’s tax is 36 cents a pack, Arkansas’ is 59 cents, Tennessee’s is 62 cents and Alabama’s is 42.5 cents, according to the Campaign for Tobacco-Free Kids, an anti-smoking group based in Washington.

The group says South Carolina’s tax is 7 cents a pack and Missouri’s is 17 cents.

Before being elected governor in 2003, Barbour was a high-profile Washington lobbyist whose client list included tobacco companies. He opposed efforts to increase Mississippi’s tobacco tax the past few years, but said last fall that he would support a modest increase in 2009.

Barbour’s change of position came after he appointed a commission of business people, professors and public officials to study the state tax structure, and the commission last summer recommended an increase in the cigarette tax.

Legislative leaders are trying to increase the tax soon in hopes of bolstering the state’s lagging revenues before the budget year ends July 1. The Senate proposes using new cigarette tax revenue to head off an increase in car tag prices. House leaders want to use the money to restore millions of dollars that had been cut from elementary and secondary schools.

Congress is debating whether to set the federal cigarette excise tax at $1 a pack — an increase of 61 cents. The higher federal tax would help pay for the State Children’s Health Insurance Program, which covers children in families earning too much to qualify for Medicaid but not enough to afford private insurance.

The bill is House Bill 364.