Barbour cuts $158M from $5B Mississippi budget

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January 14, 2009

Anonymous The Meridian Star Wed Jan 14, 2009, 10:10 PM CST

JACKSON (AP) — Mississippi Gov. Haley Barbour sliced $158.3 million from his $5 billion state budget Wednesday, including almost $90 million from public schools.

Moments after the reductions were announced, the state House approved what could be a longshot bill to add 82 cents to the cigarette tax on March 1, up from the current 18 cents a pack.

Supporters say if the House bill becomes law, the $1-a-pack tax could generate $68 million to $70 million before the budget year ends June 30.

House Ways and Means Committee Chairman Percy Watson, D-Hattiesburg, said the primary purpose of the bill is to generate new state revenue, but a higher tax might also force some young people to stop smoking.

‘‘We really feel that this is the right thing to do, the proper thing to do,’’ Watson said.

Rep. Alex Monsour, R-Vicksburg, said it’s common for people in Louisiana to drive to his hometown to shop for items that are cheaper in Mississippi. He said he fears if the cigarette tax increases dramatically, people from Vicksburg will start crossing the Mississippi River to buy their cigarettes along with their Louisiana lottery tickets.

‘‘We’ve got to be smart about what we do about this cigarette tax,’’ said Monsour, who opposed the bill.

Louisiana’s cigarette tax is 36 cents a pack, Alabama’s is 42.5 cents, Arkansas’ is 59 cents and Tennessee’s is 62 cents, according to the Campaign for Tobacco-Free Kids, an anti-smoking group based in Washington. The group says the average of all states’ tobacco taxes is $1.19 a pack.

Mississippi’s cigarette tax is third-lowest in the nation. Only Missouri, at 17 cents a pack, and South Carolina, at 7 cents, have lower rates.

The tax bill passed the Democratic-controlled House 81-39, getting more than the 72 votes it needed for a three-fifths majority. The bill will have a harder time in the Republican-controlled Senate.

Barbour, a Republican, has said he favors a cigarette tax increase, but one that’s significantly smaller.

Barbour cut $42 million from the state budget in November because of lagging tax collections. He told lawmakers during his State of the State address Tuesday night that more cuts were coming because of the continued bad economy. He said state revenues could be up to $310 million short by June 30.

‘‘State law requires a balanced budget, which forces me to reduce agencies’ budgets to compensate for continued declines in state revenues,’’ Barbour said in a news release that was issued just before the close of business Wednesday.

Most state agencies have now seen their budgets cut by 5 percent. Two big-ticket items were exempted from the first round of cuts — Medicaid, the government health insurance program for the poor; and the Mississippi Adequate Education Program, a formula designed to ensure each school district receives enough money to meet midlevel accreditation standards.

Under state law, a governor may not cut any agency’s budget by more than 5 percent until he cuts every agency’s budget by that much.

Barbour said Wednesday’s cut to the Mississippi Adequate Education Program nearly was 3.5 percent, or $76.6 million. Other parts of the elementary and secondary education budget also were cut, bringing the total reduction for public schools to $87.8 million.

At the governor’s request, state agency directors filed documents in October and November showing what services they might tighten or eliminate if they lost 2 percent of 4 percent of their money.

Several directors said they would reduce travel expenses or delay the purchase of equipment.

Department of Human Services executive director Don Thompson said with a 4 percent cut, the agency would be unable to fill vacant jobs. He also said DHS’ Division of Aging and Adult Services ‘‘will not be able to serve over 64,289 home-delivered meals for elderly adults.’’

Jo Leslie, chairwoman of the state Veterans Affairs Board, said with a 4 percent cut, the board would freeze vacant positions and might have to lay off people who aren’t working in direct care in the veterans homes. Leslie also said the board might delay hiring a maintenance worker for the state veterans cemetery to be built near Newton.

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The bill is House Bill 364.

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