Cigarette tax increase begins Friday

Published 10:28 pm Wednesday, May 13, 2009

JACKSON (AP) — Republican Gov. Haley Barbour, a former tobacco lobbyist long opposed to raising Mississippi’s cigarette tax, relented Wednesday in the face of slumping budget revenues and signed the state’s first increase in nearly a quarter century.

The state’s 18-cents-a-pack excise tax hadn’t changed since 1985. On Friday, it rises to 68 cents a pack.

Mississippi becomes the latest state to make smokers pay more to boost finances during a recession. Kentucky and Arkansas also enacted cigarette tax increases this year. In Florida, Gov. Charlie Crist is expected to sign a $1 increase.

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Barbour signed the legislation as Mississippi struggles with an estimated revenue shortfall of $400 million for the year that ends June 30. The tax is estimated to generate more than $113 million for the year that begins July 1.

Barbour spokesman Dan Turner said the governor declined comment on the legislation.

The 50-cents-a-pack increase is enough to make smokers such as Pete Banks of Jackson give up his habit. The short-order cook who has smoked for more than a decade said his pack of Salem cigarettes increased to $3.94 after the federal tobacco tax increased by 62 cents a pack in April. Now, he’s about to be hit with the state tax.

‘‘I don’t need medicine to make me quit,’’ Banks said. ‘‘Paying that extra money is enough to make me quit.’’

Banks’ response has been the goal of health advocates who’ve pushed for an increase for about six years.

‘‘This cigarette tax is an overdue investment to lead to less smoking by our children and to a healthier state. We consider this a start,’’ said Roy Mitchell, chairman of the Mississippi Communities for a Clean Bill of Health. The statewide coalition of health organizations had lobbied for a $1 tax increase.

House Ways and Means Chairman Percy Watson, a Democrat from Hattiesburg who authored the bill, said he’s hopeful the state will consider another increase in a few years ‘‘as we assess the number of people in the population who are still smoking.’’

The increasing cost to care for people with diseases caused by smoking has helped sell leaders on the idea of raising cigarette taxes, said political scientist Marty Wiseman, director of the Stennis Institute of Government at Mississippi State University.

‘‘When Kentucky, where tobacco was a cash crop, raised the tax on cigarettes, that pretty well opens the door for anybody to do that,’’ Wiseman said.

However, Wiseman believes Barbour resisted the tax increase because he didn’t want to follow the path of former Arkansas Gov. Mike Huckabee.

‘‘Huckabee lacks favor with a lot of Republicans because, though he’s 100 percent Republican, he raised taxes several times in Arkansas,’’ Wiseman said. ‘‘I believe the eyes of the nation are on Barbour.’’

In the 1990s, when Mississippi sued the nation’s tobacco industry to cover the costs of treating sick smokers, some manufacturers were Barbour’s clients. The litigation led to a $3.6 billion settlement for Mississippi in 1997.

Barbour became governor in January 2004. He vetoed two bills in 2006 that would’ve increased the cigarette tax and decreased the 7 percent grocery tax. In 2007, one of his Senate allies blocked consideration of a similar cigarette-grocery tax swap.

Barbour appointed a commission in 2008 to study the state’s tax structure. Based on recommendations from the group, Barbour asked lawmakers this year for an increase of 24 cents a pack for premium cigarettes and 43 cents a pack on less expensive cigarettes produced by companies that didn’t participate in the state’s 1997 settlement of a lawsuit against the tobacco industry.

After months of haggling, legislators agreed last week to increase the tax by 50 cents a pack on all brands of cigarettes.

Lawmakers said revenue from the tax would replenish a fund that helps lower the cost of car license tags and help pay for other state services, including Medicaid, a government-funded health plan for poor and disabled.

‘‘Hallelujah,’’ said House Public Health Committee Chairman Steve Holland, D-Plantersville, noting Barbour long opposed any increase.

Other legislators are saying they only supported the proposal because of the millions needed for the state’s car tag fund.

‘‘It’s a real big deal for me to vote for any tax increase,’’ said Senate Finance Committee Chairman Dean Kirby, R-Pearl. ‘‘I have always voted against it. But this year, after looking at the surrounding states and seeing what they’ve done and also looking at what the car tag reduction fund has become, I felt like it was time for us to do something.’’