In response to Melissa Harper’s column, “Smoking tax is deceptive,” I am writing on behalf of the Communities for a Clean Bill of Health (CCBH). CCBH is a broad-based coalition of state and community organizations who share a common goal of raising the excise tax on cigarettes in the State of Mississippi. The coalition is made up of more than 40 organizations including AARP of Mississippi, American Cancer Society, American Heart Association, American Lung Association, the Children’s Defense Fund, Mississippi Health Advocacy Program and the Partnership for a Healthy Mississippi.
It seems that Harper agrees with CCBH on the need to increase the cigarette tax in Mississippi. At 18 cents, the tax ranks 49th in the nation and has not been raised since 1985. Each year, Mississippians spend $719 million on healthcare expenditures related to tobacco use while bringing in only $43 million in cigarette tax revenue. A $1.00 cigarette tax increase would result in $180 million in new revenue for the state and lead to 43,000 kids alive today to never begin smoking and 23,400 adults to quit.
It is only at $1.00 cigarette tax increase that we reach the maximum health and financial benefits of a cigarette tax. For every 10 percent increase in the price of cigarettes there is a 3 to 5 percent reduction in overall cigarette consumption. The average price of cigarettes in Mississippi is $3.55. If the excise tax was increased by only 25 cents that would increase the average price to $3.80 – only a 7% increase. That would have ZERO effect on consumption!
While our coalition is a single issue one – advocating for a cigarette tax increase – we did see the cigarette tax increase/grocery tax cut as a viable option to reduce smoking and lower the burden on hard working Mississippian’s who have to buy groceries.
Harper’s concerns about the cigarette tax increase/grocery tax cut were addressed by legislators and studied by the John C. Stennis Institute of Government at Mississippi State University – Tobacco and Food Taxation Policy Options in Mississippi.
First, in the proposed legislation, lawmakers increase the current grocery sales tax diversion from 18.5% to 37%. This assures that the legislation would have no adverse effects on Mississippi cities and towns. However, the study found that Mississippi municipalities would make an additional $18-$36 million in new revenue because of the grocery tax cut as a result taxpayers spending their savings on additional food or other taxable goods.
According to the Stennis Institute (using numbers from the State Tax Commission– which are considered to be at the high end) the gap in revenue to the state created by the increased diversion would be in near $150 million. The new cigarette tax revenue created by raising the tax to $1.00 would be near $160 million.
These findings were shared with the Mississippi Municipal League, which did not oppose the legislation in 2007, all legislators, the Lt. Governor and Governor.
You can visit www.ccbh.cc to find out more about the cigarette tax in Mississippi and visit www.msgovt.org to learn more about the Stennis Institute study.
Jarvis Dortch is a fellow in the Mississippi Health Advocacy Program.