Miss. lawmakers still pushing cigarette tax hike

Published 11:35 pm Thursday, February 26, 2009

Mississippi lawmakers say they’re still making a serious effort to increase the state cigarette tax this year, even though it’s been nearly a month since they did any substantial work to meet that goal.

Talks in Mississippi have hit a lull because legislators are trying to meet deadlines on hundreds of other bills, said state Senate Finance Committee Chairman Dean Kirby, a Republican from Pearl.

“We’re very serious and we realize that the majority of the people think it should be increased,” Kirby said of the state’s 18-cents-a-pack cigarette tax, the nation’s third-lowest.

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Since the last big discussion at the Mississippi Capitol in late January, Congress has jumped ahead and enacted a federal cigarette tax increase to help pay for a national children’s health insurance program. On April 1, the federal tax will jump to $1.01 a pack, up from 39 cents a pack.

Arkansas, one of Mississippi’s neighbors to the west, has enacted a law that will nearly double its cigarette tax on March 1, from 59 cents a pack to $1.15.

The Mississippi House voted for a cigarette tax increase to $1 a pack; the Senate voted to only increase the tax to 49 cents. Negotiators from the two chambers might start meeting next week to try to reach a compromise, Kirby said. They have until late March to reach an agreement.

One thing is clear: Legislators won’t meet their original goal of increasing the cigarette tax on March 1 — something they’d hoped to do to pad out the anemic budget for the fiscal year that ends June 30.

Republican Gov. Haley Barbour is recommending an increase of 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.

Barbour said Wednesday that lawmakers need to be cautious in estimating how much revenue a tax increase might generate, particularly since cigarette sales might decline because of the higher federal tax.

Barbour said Mississippi smokers might cross the state line to stock up if the state’s cigarette tax increases dramatically — the cigarette tax in neighboring Louisiana is only 36 cents a pack.

“If you’re saving 50 cents a pack or a dollar a pack, you know, it is worth it to people,” he said.

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. Last summer, that panel recommended increasing the cigarette tax.

Rep. Angela Cockerham, a Democrat from Magnolia, is one of the negotiators on the cigarette bill. She said the tax should be high enough to deter smoking, but she didn’t specify what she considers an ideal tax rate.

“The fact remains that Mississippi still has high death rates that are attributed to smoking, high cancer rates that are attributed to smoking,” Cockerham said.

The Senate’s proposal of 49 cents a pack was based on the average of the cigarette taxes in the surrounding states of Louisiana, Arkansas, Tennessee and Alabama — but that was before Arkansas increased its rate. With the higher rate in Arkansas, the new average for the surrounding states is nearly 64 cents a pack.

Lt. Gov. Phil Bryant, who presides over the Senate, said he wants Mississippi to increase the cigarette tax to help generate revenue for the struggling state budget.

“I think it is an issue whose time has come,” Bryant said this week.

The bill is House Bill 364.