VICKSBURG — Smoking in Mississippi will soon be more expensive.
Says who? Haley Barbour, that’s who.
The governor who has vetoed the only increase in cigarette taxes to reach his desk in the past five years said in an interview last week, “There is no question that our tobacco tax is too low.”
His point seemed to be timing and whether new money resulting from increasing the existing 18 cents per pack excise tax will be general use or pledged to a specific purpose. In any event, he said he expects lawmakers to vote on a higher tobacco tax no later than the 2009 regular session. Further, he doesn’t intend to oppose it.
The Legislature, particularly the House, and health-care advocacy groups have been insistent, trying to raise the tax as a deterrent and a source of cash or both year after year.
Mississippi’s tax is half that of the average of 35 cents in tobacco-producing states, where, presumably, some shielding of the cash crop could be expected. It’s America’s third-lowest per-pack tax. The national median is a flat $1 per pack. New Jersey, at $2.57, is highest among nine states where the tax is at least $2 per pack.
Yet, even when former Lt. Gov. Amy Tuck sweetened the deal three years ago by proposing a tax swap — raising the cigarette tax by $1 and cutting the state’s 7 percent levy on groceries to make any increase revenue-neutral — Barbour, a fellow Republican, refused to blink.
That, among other things, fed the belief that Barbour, described as a “former tobacco lobbyist” from the day he announced for his first term, was shielding clients of Barbour, Griffith and Rogers, the Washington, D.C., firm he founded.
He’s long skirted the label of being tobacco-friendly, not addressing it directly.
He did in the interview.
“I don’t owe those people anything. They don’t owe me anything,” he said of the tobacco firms that have been among the hefty client list of BG&R.
During most of his new term and still today Barbour has attributed his opposition to raising the tobacco tax to his core position that Mississippians are taxed enough and that it’s incumbent upon leaders to budget within the state’s means.
But that phrase wouldn’t hunt when Tuck’s plan was debated. She agreed with Barbour that the state didn’t need the money, but insisted along with health groups that the state did need to discourage young people from taking up tobacco by setting a price higher than they might pay. So Barbour responded by borrowing a phrase, knowingly or not, from Al Gore. He called Tuck’s tax swap “risky” given the uncertainties associated with the post-Katrina economy.
After being elected to a second term last November, Barbour selected a public-private panel to conduct a top-to-bottom review of all Mississippi taxes. That delayed any showdowns on tobacco taxes during this year’s regular session.
In the interview, Barbour said he expects the comprehensive report, due the last day of this month, will recommend a tobacco-tax increase and, he said, unless it’s something bizarre, he’ll support it. “I’m going to respect their recommendations,” he said. “I may not like the whole report, but they are working in good faith.”
So the remaining issue of a tobacco tax “adjustment” will be what to do with the money.
Barbour says there were 19 destinations specified for higher tobacco taxes in bills filed from 2004 to 2008. Most were for Medicaid, including this year’s stalemate over whether to use smokers to raise the $90 million needed to cover a shortfall. Next most-mentioned was the general fund. Tobacco dollars were also to be earmarked for K-12, for two-year schools and for universities, for the crime lab, mental health crisis centers, the Mississippi Development Authority, narcotics enforcement, trauma centers and the law enforcement academy, among others.
And that, Barbour indicated, reinforces his starting argument against piecemeal budgeting and running back to taxpayers in general or specific “sinners” whenever government identifies a need.
He’s putting a lot of faith in the tax study, chaired by industrialist Leland Speed of Jackson, who, having also served a term as director of state employer recruiting, knows his way around both private and public balance sheets.
Barbour said without hesitation cigarette taxes will likely rise. Those who keep score will see that as a defeat for a governor linked by inference so long to “big tobacco.” On his part, he’ll score it as a win as long as the increase is part of a balancing among revenue sources.
