Raising the cigarette tax

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December 22, 2008

Proponents of measure want money to fund Medicaid

By Brian Livingston The Meridian Star Mon Dec 22, 2008, 11:27 PM CST

blivingston@themeridianstar.com

In five cities across the state this fall, members of the Mississippi Health Advocacy Program (MHAP) conducted community forums or dialogues to gauge support for a $1 tax increase for a pack of cigarettes.

What they found was an overwhelming majority of those people who attended the discussions in Hattiesburg, Gulfport, Tupelo, Greenville and Meridian supported the increase that would fund the state's failing Medicaid system.

"There's a disconnect between public opinion and public policy," said Roy Mitchell, the program's executive director. "Mississippians overwhelmingly support adding a dollar."

Surveys done by the Mississippi Social Science Research Center showed 72 percent of Mississippians favor raising the cigarette tax by $1; nearly 85 percent favor putting the tax into a special fund for Medicaid.

But Gov. Haley Barbour is supporting a 24 cent cigarette tax increase. Regardless, Mitchell and the MHAP are determined to push for the $1 tax increase during this spring's legislative session. Mitchell said he has the recent economy woes and a $90 million Medicaid deficit as ammunition for his group's proposal.

"About 20 percent of our population in Mississippi is on Medicaid, and that is a huge economic driver," said Mitchell, referring to the health-insurance program that serves about 600,000 of the state's children, elderly, disabled and poor. "The Medicaid program has been underfunded in Mississippi, leaving millions of dollars in potential revenue on the table."

Mississippi receives a 3-1 funding match from the federal government, meaning for every 25 cents the state spends the federal government matches with 75 cents. Mississippi receives the highest federal Medicaid assistance percentage in the nation — around 76 percent.

Community dialogue programs were held in Meridian, Oct. 30, and four other cities this fall, which brought together members of the community to talk about the health of Medicaid. Much of the conversations centered on how to pay for Medicaid, how to make it more accessible to more families and how a one dollar cigarette tax would effect both.

Participants in the community discussion groups, which totaled 125 people throughout the five locations, unanimously agreed that any tax collected from the sale of cigarettes be placed in a special account to be used solely for the funding of Medicaid. Their fear was if the money is put into the state's general fund Medicaid will not benefit from the higher taxes raised.

Mississippi’s cigarette tax policy is considerably out of line with other states. Mississippi has not increased its cigarette tax since 1985 and at 18 cents per pack it is almost a full dollar behind the national average — $1.16.

In addition to bringing in an extra $174 million, Mitchell and proponents of the tax increase said they believe measure, if passed, would cause about 23,400 adults to quit smoking. It would also mark a 20 percent decrease of youth smoking, which in the years to come would result in $1 billion of long-term health-care savings, they said.

"Smokers are costing us all in terms of long term health care," said Mitchell. "The cigarette tax would force them to, 'Pay their share,' in terms of healthcare statewide."

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