Legislators fail to agree on cigarette tax increase

JACKSON – The proposal to increase Mississippi’s 18-cent-per-pack cigarette tax, the third-lowest in the nation, died Wednesday night when House and Senate negotiators could not agree on how much to raise it.

The six negotiators had one last meeting before the 8 p.m. deadline, but could not hammer out an agreement. The House dropped its proposal another 10 cents to 80 cents per pack. The House’s original proposal was $1 per pack.

The Senate refused to budge from the last proposal it made – 60 cents per pack. The Senate’s original offer was 49 cents per pack.

At the time the Senate passed the 49-cent-per-pack tax, that was roughly the average of the surrounding states. Since then, the neighboring state average has jumped to 64 cents per pack.

Finance Chairman Dean Kirby, R-Pearl, the main Senate negotiator, said anything more than 60 cents per pack would have been defeated on the Senate floor. Plus, he said Republican Gov. Haley Barbour, who in past years has successfully blocked efforts to increase the cigarette tax, was “not excited” about anything above 60 cents per pack.

“There is no need to bring a bill out if we can’t pass it,” Kirby said. “…I know the Senate. I know what we can pass and can’t pass.”

Ways and Means Chairman Percy Watson, D-Hattiesburg, the lead House negotiator, said the bill died because of “the refusal of the Senate to negotiate.” He said he knew the negotiations were over when the Senate would not budge from its 60-cent-per pack stance.

At this point in the session, it would take a two-thirds vote of both chambers to revive the tobacco tax issue. Kirby had said he would have a difficult time garnering the three-fifths majority in the Senate to pass the 60-cent proposal, so the possibility of garnering the two-thirds majority seems remote.

The inability to generate additional money through a cigarette tax increase could put budget negotiators in a difficult situation. Because of declining state tax collections, they were counting on additional cigarette tax revenue to help shore up the budget – especially to replenish a fund that holds down the cost of car tags. Unless about $25 million is found from another source in a tight budget year, the cost of a car tag is scheduled to nearly double as of May 1.

Work on the budget will not begin in earnest for several days. On Wednesday, both chambers voted to extend the session at least 30 days to work on the budget. All sides agree they need to garner more information about how federal stimulus funds can be plugged into the budget.

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.

Bobby Harrison/Daily Journal

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