Lawmakers Pass Another Tobacco Tax

File Photo

June 30, 2009

After years of not raising taxes on cigarettes, yesterday Mississippi lawmakers approved the second cigarette tax hike this year. Even more surprising, Gov. Haley Barbour, a former tobacco lobbyist who vetoed raising the state's excise taxes numerous times in the past, said he would sign the bill into law.

After a long battle over the details, the Legislature pushed through this year's first cigarette tax increase in May, adding 50 cents to every pack of smokes sold in the state. It was the first such increase since 1985. Now, this second tax adds 25 cents to any cigarettes manufactured by companies that were not part of Mississippi's 1997 lawsuit against big tobacco, reports the Hattiesburg American.

Top lawmakers said the tax of 25 cents on cheaper cigarettes will generate about $8.8 million a year.

That's a small portion of the overall $6 billion lawmakers are scrambling to approve before the state's new fiscal year begins Wednesday. But the threat of having to find $8.8 million of budget cuts pressured some lawmakers, including Democratic Sen. Willie Simmons of Cleveland, into accepting the tax.

Simmons said he feared the cuts would come out of Medicaid, the government health insurance program for the needy.

"I'm going to hold my breath, hold my nose, and I'm going to vote for this bad boy because this is the right thing to do," Simmons said.

The 2010 fiscal year begins tomorrow, and as of this morning, the state still does not have a budget, which may cause some agencies to shut down.

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posted by Ironghost on 06/30/09 at 10:28 AM