Miss. lawmakers might consider additional cigarette tax

Published 12:00 am Saturday, June 13, 2009

JACKSON (AP) — Mississippi budget negotiators agreed Friday to fully fund two critical programs for public education, but they still haven’t set an overall $5 billion state spending plan for the fiscal year that begins July 1.

Another new development: Negotiators said an additional tax might be considered on inexpensive cigarettes — on top of the 50-cent-a-pack increase that took effect on all cigarettes May 15.

Negotiators also said they want to give permission to the state auditor and Tax Commission to auction about a million packs of contraband cigarettes seized by federal and state agents in a raid several weeks ago. Officials estimated the auction could bring the state $5 million to $10 million.

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Gov. Haley Barbour will call the full House and Senate back to the Capitol for a special session once the negotiators have agreed on a budget outline. It’s still not clear when that might happen. Fewer than a dozen legislators are deeply involved in the negotiations, but all 121 House members and 52 senators will get a chance to vote on spending bills.

Mississippi lawmakers usually finish a budget by early April, but they gave themselves more time to work this year because they wanted to see how the federal stimulus package will affect state government. State agency directors and local school administrators are nervously watching the calendar as the new fiscal year approaches.

‘‘I’m trying to push us together to stay at this until we get it done,’’ House Speaker Billy McCoy, D-Rienzi, said Friday as he and two House negotiators met with two of their Senate counterparts.

They agreed to fully fund the $2.2 billion Mississippi Adequate Education Program, a complicated formula designed to ensure that each school district receives enough money to meet state accreditation standards. They also agreed to set aside enough money to pay for the $6,000 annual salary supplement for each teacher who completes a rigorous series of projects and examinations to earn national certification — a top ranking in the profession.

The biggest point of disagreement was still over the budget for Medicaid, the government health insurance program for the needy. Barbour wants lawmakers to set a hospital tax that would generate $90 million a year to help pay for Medicaid. Hospital executives say the tax would hurt their finances, but patient advocates say the expense would be passed along to sick people.

Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, said Friday that he wants to set the hospital tax at $60 million a year. McCoy said the House is unwilling to go above $57 million.

On tobacco, Barbour is proposing additional excise tax of 22 cents a pack for inexpensive cigarettes made by companies that did not participate in Mississippi’s 1997 settlement of a massive lawsuit against makers of premium cigarettes. He also wants to change the method of taxing smokeless tobacco, but negotiators on Friday were not discussing that part of his plan.

Mississippi’s cigarette excise tax for all brands jumped to 68 cents a pack last month. It had been 18 cents a pack since 1985.

Barbour, a former tobacco lobbyist in Washington, had long opposed increasing Mississippi’s cigarette tax because he said he didn’t want to increase any type of taxes. A commission he appointed to study the state tax structure last year recommended an increase in the cigarette excise tax. Based on that recommendation, Barbour supported the increase this year.

Meanwhile, the state’s proposed auction of seized cigarettes has been approved by federal officials, an auditor’s spokeswoman said. If the cigarettes are not auctioned by the state, the federal government could destroy them.