The state could lose $290 million if the Senate version of the cigarette tax should pass the House today to become law, according to budget figures available to legislators.
That's because the cigarette tax is tied to a decrease in sales taxes on groceries.
Currently, the state charges 18 cents of excise tax on every package of cigarettes sold. That's one of the lowest rates in the nation. The Senate-passed bill will see that excise tax rise to 75 cents on July 1. It'll rise to $1 on July 1, 2007.
The flip side of that Senate bill is that Mississippi's 7 percent sales tax on food would begin to decrease. The measure calls for 2 1/2 percentage points to come off the grocery tax in July, another percentage point in 2007, and one-half of a percentage point each July 1 after that until 2014 when the tax on food goods would disappear.
"That's a chunk of change," said John Mayo, D-Clarksdale. "We are going to have to make up the difference somewhere."
Rep. May Whittington, D-Schlater, said she wants the tax on the cigarettes but doesn't want municipalities to suffer from the lack of sales tax.
Each year for several, Whittington has introduced a bill on the House side that would see the excise tax on cigarettes increase to $1 per package. She wants the money to go to health care.
Whittington is a recovering smoker and cancer survivor.
Mayo called the move by Lt. Gov. Amy Tuck a "very smart political ploy. Who can vote 'no' to reducing the taxes on food?"
Mayo agrees with Whittington that many cities and small towns would hurt.
Reps. Willie Perkins Sr., D-Greenwood, and Robert Huddleston, D-Sumner, didn't return telephone calls.
The bill calls for reimbursement to cities for their losses, but the reimbursement isn't nearly enough to allow cities and towns to recover from the tax hit.
Said Greenwood Mayor Harry Smith, a Republican, "I haven't seen any figures, but it seems they are acting very prematurely. They need to slow down."
If cities lose this grocery tax, it's likely they'll have to make it up in ad valorem or property taxes or cut services.
Smith advocates passing the tobacco tax and escrowing the money for a year, then coming back to visit a reduction in grocery sales tax after the state sees what it has from the tobacco tax.
Gov. Haley Barbour, a former tobacco lobbyist, doesn't support the measure.
Barbour spoke against it in his State of the State address delivered Monday evening.
"The first year of this Legislature and Administration, tax revenue went up 4 percent; last year it increased nearly 8 percent," the governor said.
"Revenue increases doubled two years in a row, even though we didn't raise anybody's taxes. And I hope this makes it easy for you and our viewers to understand why I'm against raising anybody's taxes," Barbour said.
"I expect the viewers also understand that in a period of fiscal uncertainty this is not the time to reduce revenue by cutting taxes either," he added.
The tax bill passed the Senate 36-15 on Friday.
It moved through the House Ways and Means Committee on Tuesday.
But conservative delegates in the house, the Mississippi Legislative Conservative Coalition, had lunch together before the issue came up to suspend the rules and allow a measure passed in committee to come on the floor for a vote.
At least one member of the coalition, Rep. Bill Denny, R-Jackson, indicated that too many unanswered questions about the bill lead to the delay of its consideration.
The bill is Senate Bill 2310
- House: The Transportation Committee passed a primary-offense seat belt bill, which would allow law enforcement officers to pull over a vehicle if they see a driver or a front-seat passenger is not wearing a seat belt. Under the present law, there has to be another reason to stop the vehicle, such as speeding. The House proposal would carry a $25 fine. A similar measure, but with a $50 fine, passed the Senate last week. Eventually the two chambers will exchange bills.
The Education Committee met Tuesday and chairman Rep. Cecil Brown, D-Jackson, named Rep. May Whittington, D-Schlater, as chairman of the committee's subcommittee on Charter Schools. Three Democrats and three Republicans will serve on the subcommittee.
- Senate: The Senate approved a group of resolutions Tuesday. Among those was one introduced by Sens. Jerry Jackson, R-French Camp, and Robert G. "Bunky" Huggins, R-Greenwood, that commended Dr. Katrina Poe of Kilmichael, who was chosen national 2005 Country Doctor of the Year by Staff Care Inc. Poe, 35, is the second female and the first African-American physician to earn this honor.
