Just do it: Cigarette tax increase would offer much needed revenue; would offset car tag increase

April 8, 2009

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The state Legislature shouldn''t be faulted for delaying adoption of the state budget as it awaits more information about how to spend the federal economic stimulus money Mississippi is getting. But, to say the least, it''s alarming the House and Senate have been unable to agree on how much to raise the cigarette tax. 

 


This is costing the state millions of dollars most lawmakers and the governor agree is needed to generate money for the state treasury and to deter people from smoking. 

 


With the House and Senate just a few cents apart on how high to raise the 18-cent-a-pack tax, it would be sad to see the state lose its chance at having the more than $100 million a cigarette tax would generate. 

 


With Gov. Haley Barbour supporting an increase - after having killed such legislation with his veto-backed opposition in the past -- the House and Senate passed differing cigarette tax-increase bills in January. The House approved a $1-a-pack tax. The Senate said 49 cents. They had hoped to quickly agree on the new tax rate and enact it so revenues could start flowing by now.  

 


It''s April and they still haven''t reached a compromise. 

 


House and Senate leaders have bent, but not enough to satisfy both sides. 

 


In seeking a compromise, House negotiators have gradually bargained down to 90 cents, 80 cents and 75 cents. Senate leaders have moved up to 55 cents, 60 cents and then 64 cents. Still no deal. Surely one can be made to increase the nation''s third-lowest cigarette tax that''s remained unchanged since 1985. 

 


The Senate''s latest offer would generate at least $114 million a year in new cigarette tax revenues for the state treasury, according to Senate estimates. 

 


One key motivation to increase the cigarette tax are the revenues it can generate for the state''s dwindling car-tax reduction fund. The House and Senate want to use about $23 million of the new cigarette money to help keep car-tag prices from doubling - as is being feared if nothing is done. This should be enough impetus for the House and Senate to reach an accord and enact the cigarette tax increase. 

 


The Legislature recessed April 1 with plans to return later to pass the state budget before the next fiscal year starts in July. They''re awaiting more information about how to spend the $2 billion-plus Mississippi is receiving from the federal economic stimulus package Congress passed in February. 

 


However, they don''t need to wait on passing a cigarette tax bill. Reach a deal now and just do it.