JACKSON – Lawmaking in Mississippi has come to a sad state when we have to look to a doctor, ophthalmologist Richard Blount, to remind those at the state Capitol controlling the fate of a cigarette tax increase that a tax on tobacco must be focused on its harm to public health and the state economy.
Dick Blount in his recently published letter to the editor warned against the false logic coming out of legislative halls to use a cig tax increase to subsidize the cost of automobile license plates rather than health.
Lt. Gov. Phil Bryant is the chief proponent of the tobacco tax-tag scheme and says he will only go along with raising the ridiculously low tobacco tax if the proceeds go to bail out an impending spike in car tag prices issued by counties. New car sales have tanked and the subsidy fund is short some $25 million, so counties hiked tags.
n Car tags aren’t a state revenue source, they’re a county levied ad valorem tax on cars.
n The price of an automobile license plate is totally unrelated to damage and cost to public health caused by tobacco use.
Bryant has led the public – and much of the press – off on a false rabbit trail with his car tag-tobacco tax scheme, and made it into a this-or-nothing proposition. As the Senate’s presiding officer he holds life-or-death control on whether or not a cig tax hike will pass. What he thinks matters, no matter how obtuse is his rationale.
The tobacco tax-car tag brouhaha at least provides an opportunity to examine the whole area of taxation revolving around automobiles and the fuel used to propel them. Rather than rush far afield into using tobacco taxes to subsidize car tags, logic demands lawmakers tap one or several taxing sources in the auto-fuel area by simple legislative action.
n First look at the state’s 18 cents-per-gallon excise tax on gasoline. When lawmakers passed it in 1986 as part of a major highway program, the sales tax on gasoline was eliminated. Motorists don’t know from day-to-day whether the pump price of gasoline is going to be $2 or $4 a gallon, including the fixed state and federal excise taxes. While consumers have to pay the 7-cent sales tax on a gallon of milk, the state gets no sales taxes on a gallon of gas.
n Lawmakers could put back a half cent per gallon sales tax – with a two year repealer – on gasoline and bail out the license tag fund until new car sales pick up. Or, since the full 5 percent sales tax on USED cars – now selling better than new ones – goes into the state general fund rather than the car tag fund, there’s another source to cover the car tag fund shortage.
n Few people know that since 1960, state law diverts 2 cents per gallon out of he state’s excise gasoline tax (last year $45.3 million) to counties under a weird allocation formula. Off the top, $160,000 goes annually to each county, then the overage is allocated according to the county’s population and total road miles. Part of the 2-cent diversion to counties was intended to go for city streets but often doesn’t get there, as Jacksonians know.
Why not use part of the 2-cent gas tax diversion to help bail out the tag fund? As Dr. Blount has written, decision-makers at the Capitol should keep their hands off an increase in the tobacco tax unless it can go exclusively toward tobacco-related health costs, with Medicaid high on the list.
Bryant has absolutely no credentials in the cigarette tax hike debate. Initially he wanted it for Medicaid, later to subsidize an income tax cut and now the car tag gambit. His trouble is he is nailed down to some “no new taxes” pledge to keep his bonafides to the Republican right.
But get this: a week or so ago when the anti-tax “Tea Party” was assembling in front of the state Capitol, Bryant was upstairs in a room negotiating with House fiscal leaders on how much to raise the tobacco tax, and reinstate the hospital bed tax.
So when the Senate-House tax negotiations took a break, what did our nimble Mr. Bryant do? He went downstairs (the only state official to do so) and regaled the Tea Party crowd with a speech denouncing taxes.
Bill Minor is a syndicated columnist who has covered Mississippi politics since 1947. His address is Box 1243, Jackson, MS 39215. Send e-mails to Minor through firstname.lastname@example.org.