Cigarette tax OK’d in Miss. House

Published 11:19 pm Thursday, February 21, 2008

JACKSON (AP) — A plan to put an extra $1 tax on every pack of cigarettes cleared the Mississippi House on Thursday, but it is likely to die in the Senate later this session.

The past two years, lawmakers have tried to pair an increase in the cigarette excise tax with a decrease in the grocery sales tax — and many campaigned in 2007 on promises to shrink the 7 percent that people pay on essentials like bread and milk.

This year, however, lawmakers are not discussing a grocery tax reduction.

Instead, the cigarette tax is being considered by itself as a way to generate money for the financially struggling Medicaid program.

Mississippi now has one of the lowest cigarette excise tax rates in the nation, at 18 cents a pack. The House plan would increase that to $1.18.

The bill passed the House 74-42, barely over the 70 votes it needed.

Gov. Haley Barbour vetoed two cigarette-grocery ‘‘tax swap’’ bills in 2006, and one of his allies blocked the plans in 2007. The new Senate Finance Committee chairman, Republican Dean Kirby of Pearl, said he won’t consider any tax increases this year.

Even if Kirby were to change his mind and the cigarette tax increase were to pass the Senate, it probably would be vetoed by Barbour, who has created a group to do a comprehensive study of Mississippi’s tax structure.

Overriding a veto would take 82 votes in the 122-member House; that number could drop if some members were absent or abstained from voting.

Dr. Joe Donaldson, president of the Mississippi chapter of the American Academy of Pediatrics, said Mississippi has one of the highest rates of smoking in the nation. He said a higher tax could deter some people from starting the addictive habit.

‘‘I think it’s time that we quit subsidizing ill health which is what we’re doing by having such a low tax on cigarettes in Mississippi,’’ Donaldson said during a news conference Thursday at the Capitol.

House Medicaid Committee Chairman Dirk Dedeaux, D-Perkinston, said adding $1 a pack to the cigarette tax would generate about $174 million a year.

Several health care administrators were at the Capitol to lobby for the cigarette tax increase in hopes of derailing Barbour’s plan to impose a hospital tax to bolster the Medicaid budget.

Rep. Greg Snowden, R-Meridian, addressed the administrators as he argued on the House floor against the bill.

‘‘To my friends in the gallery, this bill has no chance. It has zero chance in the Senate,’’ Snowden said.

Still, the hospital leaders applauded from the House galleries after the cigarette tax bill passed.

Barbour spokesman Pete Smith said later: ‘‘The governor doesn’t think it’s a good idea to use an increase in cigarette tax to pay for a tax cut for hospitals.’’

Dale Armour is senior vice president for Health Management Associates Inc., which operates 11 facilities in Mississippi, including Northwest Regional Medical Center in Clarksdale, Riley Hospital in Meridian and Central Mississippi Medical Center in Jackson.

Armour told The Associated Press that a hospital tax could put some companies’ facilities out of business.

‘‘I know some of them are on the borderline of closing today,’’ Armour said. ‘‘I think this would push some over the edge. You’d end up losing jobs and the economy would suffer.’’

Barbour is a former Washington lobbyist whose client list included tobacco companies.

House Public Health Committee Chairman Steve Holland of Plantersville — a Democrat who’s running for Congress — said during the House debate Thursday: ‘‘Talking about tobacco the last four years has not been easy under this dome, because it’s been a full frontal assault by the executive branch to protect it at every level.’’

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The bill is House Bill 1013.



AP-CS-02-21-08 1746EST

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