Leaders vow to reach pact on car tags

April 21, 2009



JACKSON -- State legislators are getting increasingly agitated in seeking a compromise on raising the cigarette tax to help prevent car tag prices from going up.  


"I believe enough is enough," said Republican Lt. Gov. Phil Bryant. "We have got to come together as Republicans and Democrats to help offset the skyrocketing costs of car tags." 


"The people of Mississippi demand action, and they demand it now." 


Democratic House Speaker Billy McCoy agreed, noting the House and Senate are "only a few cents" from reaching a consensus on a cigarette tax increase. It''s been in legislative limbo for three months. 


"We''re fighting for ordinary Mississippi families during these extraordinary times. We don''t want car tags to go up," McCoy said. 


Legislators are trying to generate more than $100 million to preserve Mississippi''s car tag discounts and also mend the state''s Medicaid funding deficit.  


"We have considered the car tag dilemma and Medicaid, both of which are important problems we''re ready to resolve. The House plan will get the job done," McCoy said. 


Bryant, who presides over the Senate, and McCoy, who heads the House of Representatives, spoke out separately Monday through written statements and a news conference, in advance of a negotiating session being held today by Senate and House bargainers. They''re trying to end the long-running stalemate over the cigarette tax-car tag quandary. 


The state Legislature is currently in recess with plans to return in May. 


Since the Democratic-dominated House and GOP-controlled Senate passed differing versions of the cigarette tax bill in January, legislators have slowly come closer to an accord. But it hasn''t been enough to seal a deal. 


In raising the current 18-cent tax, the House has offered to go up to 75 cents per pack. The Senate wants 64 cents for regular brands and 84 cents for generics. 


Adding more impetus to raising the cigarette tax, the state Tax Commission voted last week to decrease the discounts people have been receiving for their car taxes since 1994. The car tag credit would decline from 5.5 percent to 3 percent.  


The commission has been warning since January this cut would happen beginning in July as the state''s car-tax reduction fund runs out of money due to a decline in automobile sales. Sales tax revenues are diverted to counties to replace local taxes lost because of the car tag credits. 


At his news conference Monday in the state Capitol, Bryant announced the creation of a new Web site -- CarTagRelief.com -- to give updates on the issue and the amount of the increases. The Web site initially inflated by mistake the higher amounts car owners would have to pay, according to The Associated Press. 


The amount of the taxes varies according to the value and age of vehicles and county and city tax rates. 


For example, with the reduced discount, a car tag for a 2009 vehicle valued at $20,000 would increase by $135, according to the state Tax Commission. The current 5.5 percent discount is $297; the 3 percent discount would be $162. 


For a 10-year-old-or-older car valued at $20,000, the tag would be $2.50 higher, with the discount falling from $5.50 to $3. 


During recent bargaining sessions, House and Senate negotiators agreed to use $23 million in cigarette-tax revenues to put into the state Motor Vehicle Ad Valorem Tax Reduction Fund, but they haven''t come to terms on what the new cigarette tax should be. 


Bryant on Monday reiterated his call for the House to accept the Senate''s newest cigarette tax proposal, which is up from the 49 cents in the original Senate-passed bill. 


"I''m encouraging them to reach common ground -- to understand that this solution must be reached sooner rather than later," said Bryant, who was joined by several Republican legislators at his news conference. 


House Majority Leader Tyrone Ellis, of Starkville, said Democrats have tried hard to reach consensus by going from the $1 tax the House originally passed to its 75-cent compromise. 


"If the Senate would cooperate, we can work through this," Ellis said. 


If the House and Senate agree on a cigarette-tax increase, the bill would go to Republican Gov. Haley Barbour. He has proposed a 60-cent tax on standard-brand cigarettes and higher taxes on generics and smokeless tobacco.