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Miss. gov. mum on cigarette tax level he’d accept

Mississippi Gov. Haley Barbour will not publicly say how large a cigarette tax increase he would be willing to sign into law.

Speaking to reporters Wednesday at the Capitol, Barbour would only say that he doesn’t want lawmakers to overestimate how much money any tobacco tax increase would generate.

“My biggest point to them is — whatever you settle on, let’s have an honest, realistic revenue estimate that doesn’t come back to haunt us,” Barbour said.

Mississippi’s current cigarette excise tax of 18 cents a pack is the third-lowest in the nation.

The House started this year trying to set the tax at $1 a pack, and the Senate started at 49 cents.

The Senate has gone up to 64 cents a pack for premium brands and 84 cents a pack for generics. House negotiators have gone down to 75 cents a pack for all cigarettes.

Barbour said he has expected lawmakers to eventually compromise on about 60 cents a pack, but he wouldn’t say whether he’ll approve that.

Legislators were in session almost three months before leaving the Capitol on April 1. They’re on break for several weeks while officials figure out how the federal stimulus package might affect Mississippi government. The 122 House members and 52 senators will return to Jackson in May or June to finish writing a budget for the year that begins July 1.

The budget process depends, in part, on a decision about whether to increase the cigarette tax. Negotiators on the cigarette tax will meet sometime during the break but no time has been set, said Senate Finance Committee Chairman Dean Kirby, R-Pearl.

The federal cigarette tax rose on April 1 from 39 cents a pack to $1.01. The dramatic jump made some Mississippi lawmakers more hesitant to increase the state tax.

Barbour said Wednesday that the federal tax increase should make state officials more cautious in estimating how much money a state tax increase could generate.

“When you raised the federal cigarette tax 61 cents and you’re in a recession in the poorest state in the country, the old models for how much price increase drives down consumption are going to be off,” Barbour said. “Those models were made in the richest economy in the history of the world. When you’ve got 10 percent unemployment and a recession like that, those models overestimate revenue.”

Before becoming governor in January 2004, Barbour was a high-profile Washington lobbyist whose client list included tobacco companies.

Barbour has blocked cigarette tax increases the past several years, saying he opposed raising any taxes. But in 2008, he appointed a commission of business people, professors and other financial experts, and that group recommended a cigarette tax increase.

Based on the commission’s work, Barbour recommended 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 on Wednesday repeated what he has said several times before, that he does not want lawmakers to designate the cigarette tax revenue for any particular program. He wants the money to go into the general state budget. Senate leaders want to use the cigarette tax money to head off an increase in the price of car tags.

Barbour also said he wants legislators to consider an issue that’s been off the table for most of this year — a change in the way snuff is taxed. Barbour wants smokeless tobacco to be taxed by weight rather than by the bag.

The bill is House Bill 364.