No consensus in Legislature on tobacco tax

Legislation raising tobacco taxes is expected to face more debate today, but despite early optimism Tuesday, there is no consensus on how high the tax should be and how the money should be spent.

Negotiations between House and Senate leaders that had appeared promising ended with no agreement Tuesday. Senate leaders had warmed to a bigger increase than they had previously wanted, but changed their minds after learning the state may receive money from a federal bailout. They also shared concerns with Gov. Haley Barbour over what impact a proposed federal cigarette tax hike would have on Mississippi’s plan.

As a result, Senate Finance Committee Chairman Dean Kirby said he will offer a significantly lower tax increase than the 82-cent hike that cleared the House recently. Kirby, R-Pearl, also wants some of the revenue used to offset car tag costs that are in danger of rising.

Asked to describe the state of negotiations, House Ways and Means Committee Chairman Percy Watson said discussions “are not near to any type of compromise.” Lawmakers plan to continue meeting, though.

The fallout comes amid lagging revenues that have prompted $200 million in budget cuts. State agencies and public schools are struggling to find ways to trim without affecting services.

The state’s schools could benefit from a federal stimulus package winding its way through Congress, state Superintendent Hank Bounds said Tuesday.

Bounds said it is too early to know whether the legislation will be approved in time to help schools recover from budget cuts during the current fiscal year that runs through June 30. Eight public school districts won’t be able to make payroll through the end of the school year as a result of $76 million in cuts to the Mississippi Adequate Education Program, and several others are in financial danger.

But a federal stimulus package could help districts in the next fiscal year, which is expected to be even more financially strapped.

“I do think we’re going to get a significant amount of money for education in the stimulus package. I think it’s just too early to say in what form (and) how it can be spent,” Bounds said, adding the Department of Education is working with Mississippi’s congressional delegation on the details.

Medicaid, the health care program that serves around 600,000 Mississippians, also may get a boost. The federal-state program is expected to grow during this national recession, and congressional leaders “know states are strapped,” said House Medicaid Committee Chairman Dirk Dedeaux, D-Perkinston.


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