JACKSON – On more than one occasion, Gov. Haley Barbour has pointed out that potential revenue generated from an increase in the cigarette tax has been committed to just about every project known to mankind – well, at least to the Mississippi Legislature.
Through the years as the Legislature has debated raising the cigarette tax, the revenue from such an increase has been dedicated to:
- Education funding.
- Health care funding.
- Smoking cessation.
- A reduction of the tax on groceries.
- A reduction in the income tax.
This list does not have to stop there. It is figuratively and almost literally an endless list.
If Mississippi had a space program, it would probably be on the list. Hey, maybe the Legislature can start one.
Of course, none of those items reaped any revenue from an increase in the cigarette tax because Barbour has always blocked such an increase from occurring.
Well, the currently in recess Legislature is debating increasing the cigarette tax again. This time around the talk is the revenue – at least a portion of it – will go toward holding down the cost of car tags.
A little background might be in order.
Mississippi, like the rest of the nation, is in a recession – a deep recession. Under current law, a portion of the tax on car sales is placed in a fund that provides local governments money in exchange for the local governments not taxing car owners for the full assessed value on their vehicles.
Well, lo and behold, cars and trucks are not selling because of the aforementioned recession so the tax money going into the fund has slowed to a drip. There is less money in the fund to reimburse the counties, so in July car tags are going up across the state – almost 50 percent in some counties.
Somewhere along the line, the Senate leadership, seeing pubic support for a cigarette tax increase growing, decided to get on board. But many in the Senate leadership do not like the idea of simply raising taxes. They want to say they raised the tax on cigarettes but reduced a tax in another area.
Many of them signed this no-new-tax pledge.
They now see the pending increase in the car tag costs as a reason to justify raising the cigarette tax. They can claim they raised the cigarette tax to hold down the costs of car tags.
Politicians who have never been for a cigarette tax previously are now saying the tax has to be increased to hold down the cost of car tags.
Nearly every voter owns a vehicle. Legislators know nothing will catch the voters’ attention and upset them more than doubling of the cost of car tags.
Both issues are important, but they don’t have to be connected.
Even if the cigarette tax is not increased, there are ways to deal with the car tag issue. Granted, because of the recession, it is a very tough budget year, but Mississippi has about a $5 billion budget. There are sources of money that can be tapped for one year to deal with the car tag issue.
It would take extraordinary means to use some of those sources of revenue. But many would argue that preventing a large increase in a local tax – on vehicles – would be worth extraordinary efforts.
On the other hand, health care advocates argue rather forcefully the reason the cigarette tax should be increased is not to raise revenue, but to discourage smoking.
There are studies showing a correlation between increasing the cigarette tax and reducing smoking.
Is it any surprise that Mississippi – the most unhealthy state in the nation – has the third lowest cigarette tax, more than $1-per-pack below the national average? According to research by Tobacco Free Kids, the heath care cost for each pack of cigarettes sold is more than $10.
Having said all that, the cigarette tax increase – if ever passed – will generate additional revenue. And there have been multiple suggestions on how those funds should be spent.
Using the money to hold down the cost of car tags is only the latest suggestion.
It beats spending the money to go to the moon.
Contact Capitol Bureau Chief Bobby Harrison at firstname.lastname@example.org or at (601) 353-3119.
Bobby Harrison/Daily Journal