Miss. governor says another tobacco tax possible
Mississippi Gov. Haley Barbour is poised to grab more control over the budget-writing process as top lawmakers warn they’re likely to end the on-again, off-again regular session without agreeing on a state spending plan.
Time is tight. The three-month session will end Wednesday unless two-thirds of legislators vote to extend it. The new budget year begins July 1.
Longtime Mississippi lawmakers say it’s rare to end a regular session without approving a budget. It happened in 2005, and lawmakers finished the budget that year in a special session that wrapped up by late May. If the current regular session ends with no budget, Barbour would call a special session this month, and he would control the agenda, or “call.”
Barbour said Monday that if a special session is needed, he might propose additional tobacco taxes that could generate an estimated $20 million a year. That would be a relatively small addition to a nearly $5 billion budget, but Barbour said Mississippi’s overall tax collections in May were “sharply below” where experts originally thought they’d be, and lawmakers are scrounging for every possible dollar so they can avoid laying off state employees or cutting government services.
Barbour said some agencies could face budget cuts of up to 10 percent in the coming year, depending on how much money is put into big-ticket items such as education and Medicaid. State tax collections for the first 11 months of the current budget year were 6.9 percent short of expectations.
Barbour last month signed into law Mississippi’s first cigarette excise tax increase since 1985, taking the rate from 18 cents a pack to 68.
At a news conference Monday, the governor said he has been on record since last year supporting a higher tax on cheaper cigarettes made by companies that didn’t participate in Mississippi’s 1997 settlement of a massive lawsuit against the tobacco industry. He also said he wants smokeless tobacco to be taxed by volume rather than by price. He said with the current method of taxing smokeless products, “the state literally subsidizes cheaper tobacco by giving them a lower tax.”
Barbour, a former Washington lobbyist who represented premium cigarette makers, said he would add the two new tobacco taxes to a special session agenda if budget negotiators agree there is “a need to add the additional tobacco tax.”
“I don’t have any intention of adding any other taxes to the call, and I don’t anticipate that any other taxes would be part of any agreement,” Barbour said.
David Sutton is a spokesman for Altria Group, parent company of cigarette maker Philip Morris, one of the companies paying Mississippi millions of dollars a year for the lawsuit settlement. Sutton said last month that Altria supports Barbour’s plan to put additional taxes on companies that aren’t already paying into the settlement.
Mississippi legislators met from early January until April 1, then took a break so officials could evaluate how the federal stimulus money will affect Mississippi government. Lawmakers were back at the Capitol May 6-8 to enact the cigarette tax increase, then they returned for four days last week. They’re now in recess until Wednesday, and negotiators from the two chambers are supposed to be working on the budget.
Two of the top money minders — Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, and House Education Committee Chairman Cecil Brown, D-Jackson — said in separate interviews Monday that the chambers continued to have significant disagreements over Medicaid.
Nunnelee and Brown said negotiators have no more meetings scheduled before Wednesday, when the full House and Senate return.
Barbour said Monday that his proposed budget would put a record amount of money into public education, but Brown said the governor is playing with numbers.
“He says that, but that’s not true,” Brown said.