Tax study ignites debate over revenue destination

Published 5:00 am Tuesday, August 19, 2008

Gov. Haley Barbour’s appointed tax study commission recommendedincreasing the state’s cigarette tax by as much as 50 cents perpack Friday, and already local legislators are preparing to fightfor the destination of the increased revenue.

District 92 Rep. Becky Currie, R-Brookhaven, said the governoris preparing to call the Legislature back into a second specialsession sometime in October to raise the tax and discuss the fundsgenerated. But the session’s agenda is not expected to include anoption for funding the embattled Division of Medicaid – a fact thatmay be next to impossible for House Democrats to swallow.

“It’s not to pay for anything particular, but just to implementit and start bringing revenue into the state,” she said. “When youput extra money in the general fund, everybody and their brother isgonna want to come get their part – education, roads and bridges,you name it.”

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Currie said the governor is holding back on immediatelydiverting the cigarette tax to pay for Medicaid to spread the fundsover other areas in the state budget that have been necessarilyneglected. She said some of the funds could go to Medicaid, whileothers are expected to pay for school nurses and other forms ofhealth prevention.

“There’s a lot of things we didn’t do this year because wedidn’t have the money to do them,” se said.

For hospitals, Currie still believes Senate Bill 2013 – thelegislation containing the $167 per day assessment as a means offunding Medicaid – is still the best option.

District 91 Rep. Bob Evans, D-Monticello, said House Democratswould return to Jackson in full force to attempt to snag funds fromthe cigarette tax increase to put toward Medicaid’s $90 millionfunding shortfall.

“If he brings us back for a particular issue, we have to dealwith that issue but he cannot limit us on how we do it,” he said.”I don’t think the House would demand 100 percent of the tax money,but a large percent. Tobacco money should be applied to the programthat suffers from tobacco use. It makes good ‘ole country,down-home common sense – at least to me.”

Evans agreed with Barbour’s plan to spread the revenue overvarious forms of health care and education, but is opposed to thestudy commission’s recommendations of income tax reductions forcorporations.

Regardless of how the money is ultimately distributed, Evanssaid the tax increase should be implemented as soon as possible.The longer the Legislature waits, he said, the more moneyMississippi loses.

“If we need a special session for a tax increase, Barbour oughtto say, ‘Put it in the call next Monday,’ and let’s do this thing,”Evans said. “We will lose three months of receipts if we don’t actuntil October.”

District 53 Rep. Bobby Moak, D-Bogue Chitto, agreed that theHouse would return to Jackson seeking cigarette tax earmarks forMedicaid, but also said the money could be used to offset othertaxes.

“I’m not for passing a tax for the sake of passing a tax, but ifwe pass it we could then go back to our old position of reducingsales taxes on groceries,” he said.