The deadline has passed for the Mississippi House and Senate to come to an agreement on a cigarette tax hike for this session. Legislators had until 8 p.m. yesterday to reach a compromise, and they failed to do so.
At this point, a two-thirds vote in both houses could revive the bill, but given the fact that several legislators oppose a tax increase of any kind, a revival of the hotly debated issue is questionable.
Mississippi has the third lowest state cigarette taxes of any state in the union, at 18 cents per pack. The average for the four states surrounding Mississippi is almost 64 cents per pack, and federal taxes are going up from 39 cents to $1.01 on April 1.
The House began with a $1.00 tax, and yesterday, reportedly came down to 80 cents. The Senate, meanwhile, began with a 49 cent figure, the rate in neighboring Arkansas at the beginning of the year, and increased its proposal to 60 cents. Arkansas raised its tax to $1.15 a pack a few weeks ago.
Gov. Haley Barbour, a former tobacco lobbyist, has been an opponent of raising cigarette taxes since he first came to office, regularly vetoing or threatening to veto every bill until late last year, when a tax commission he put together recommended an increase. Barbour's recommendation to the Legislature was 24 cents per pack for premium cigarettes and 43 cents for brands produced by companies outside of the 1997 $4.1 billion lawsuit settlement.
Last February, proponents of the bill said that a $1 per pack tax would generate $68 million for the balance of fiscal year 2009, keep thousands of Mississippians from ever starting the habit, and produce more than $747 million in long-term health care savings.
Opponents, including Barbour, warn that the state can't count on a tax designed to reduce smoking for ongoing revenue, and that smokers will go elsewhere to buy their cigarettes if Mississippi raises its tax.
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