Miss. Senate committee OKs cigarette tax increase

Published 12:00 am Thursday, January 29, 2009

JACKSON (AP) — Smokers might soon have to pay higher cigarette taxes in Mississippi, and the owner of a small grocery store in the northeastern corner of the state says he’s worried about losing cross-border customers.

‘‘If you pop a big tax on ’em, what’s going to happen is I’m going to be higher on prices than the surrounding states,’’ Rick Sparks said in a phone interview Wednesday from Golden Grocery, about 5 miles west of Alabama and 20 miles south of Tennessee.

Mississippi’s current cigarette excise tax is 18 cents a pack. That’s the third lowest in the nation, according to the Washington-based Campaign for Tobacco Free Kids.

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The state Senate Finance Committee voted Wednesday to increase the cigarette excise tax from 18 cents to 49 cents a pack on March 1, matching the average tax for the surrounding states of Louisiana, Arkansas, Tennessee and Alabama.

Finance Committee Chairman Dean Kirby, R-Pearl, said he’s confident there are enough votes to pass the bill in the full Senate, possibly this week. That would lead to negotiations with the House, which voted earlier this month to set the tax at $1 a pack.

Mississippi legislators have been fighting over a possible cigarette tax since 2006, and the efforts have fizzled.

There’s more momentum now because Republican Gov. Haley Barbour — a former tobacco lobbyist in Washington — opposed tobacco tax bills the past few years but said last fall that he’ll support a modest increase in 2009. His proposal is close to the Senate position.

Legislative leaders are trying to increase the tax soon in hopes of bolstering the state’s lagging revenues before the budget year ends July 1. The Senate proposes using new cigarette tax revenue to head off an increase in car tag prices. House leaders want to use the money to restore millions of dollars that had been cut from elementary and secondary schools.

Some Democrats on the Senate Finance Committee tried Wednesday to set the tax at either $1 or 70 cents a pack. Both efforts failed.

Sen. Deborah Dawkins, who used to work as a surgical technician, said she has seen some ‘‘gross and disgusting’’ physical conditions caused by smoking. Dawkins, D-Pass Christian, was one of several senators who argued the cigarette tax should be increased dramatically to prevent young people from smoking.

Barbour wants to add 24 cents a pack for premium cigarettes and 43 cents a pack on cigarettes produced by companies that didn’t participate in the state’s 1997 settlement of a lawsuit against the tobacco industry. That would set the rates at 42 cents for the higher-prices cigarettes and 61 cents for off-brands.

Sparks, at Golden Grocery, said he sells off-brand cigarettes. He said he believes his cigarette sales would remain steady if the tax increased 20 or 30 cents a pack. He said a larger increase would hurt.

‘‘I’m going to tell you — for me, it is going to mean laying off some employees if they raise it too much,’’ said Sparks, whose store has 15 workers.

Even as Mississippi lawmakers consider changing the state cigarette tax, Congress is debating whether to set the federal cigarette excise tax at $1 a pack — an increase of 61 cents. The higher federal tax would help pay for the State Children’s Health Insurance Program, which covers children in families earning too much to qualify for Medicaid but not enough to afford private insurance.


The bill is House Bill 364.