With the signing of a federal cigarette tax increase and the state cigarette tax currently under discussion, Mississippi smokers are preparing for what could be a significant price jump in cigarettes.
President Barack Obama signed a federal cigarette excise tax last week, adding 62 cents per pack to the federal excise tax, totaling $1.01 per pack. The tax will go into effect March 31.
Last month, the Mississippi House passed a bill increasing the current state cigarette tax from 18 cents to $1 per pack. Under this bill, the revenue received through the increase will go into the general fund.
Historically, education has received about 60 percent of the general fund, said Sen. Terry Burton, R-Newton.
After the House’s decision, the Senate Finance Committee changed the House bill by decreasing the proposed tax hike to 31 cents on Jan. 28, for a total increase of 49 cents per pack. Under this proposition, the revenue received will go into a fund to offset car tag costs.
Discussions in the state legislature have suggested the money be used to aid the state’s diminishing education budget, but others want the revenue to cover car tags.
Burton said a large portion of the Senate’s debate has been over the direction for the revenue.
“The money will go toward car tags or the general fund,” he said.
Sen. Doug Davis, R-Hernando, said the House and the Senate’s bills have very different destinations.
The Senate’s bill focuses on the revenue on car tags while the House’s bill passes the revenue on toward the general fund, Davis said.
“There are those who want to dedicate the tax for K through 12, there are those who want to dedicate it for car tags, as the Senate position was on Thursday [Jan. 22], there are those who want to dedicate it for health care,” Davis said.
As one of seven senators who voted against the tax bill, Davis said he disagrees with several aspects of the bill.
“I didn’t like the way that it was tied to a particular entity,” he said. “If they’re going to raise taxes, then it ought to go to a general fund and not be for a specific purpose.”
The Senate voted on the bill before the federal government finalized its plan for cigarette taxes, and Davis said he wanted to see the federal government’s actions before voting in the state Senate.
Lt. Gov. Phil Bryant said both House and Senate members are working to compromise on the tax amount.
On Jan. 26, Senate Finance Committee chairman Dean Kirby said his committee was working to settle the tax amount.
Multiple phone calls and e-mails to Kirby were not returned.
Marcella Miller, cashier at BQuik #31 on Lee Boulevard, said she does not anticipate the tax increase drastically changing the gas station’s tobacco sales.
“I don’t think it [the tax increase] will affect it [sales] that much because people will buy cigarettes nonetheless,” she said.
Senior art major Sara Lamb said the increased tax could affect her smoking habits.
“If they went up to $4 a pack, I would definitely baulk at that,” she said.
The increase could alter how often smokers, especially college students, buy cigarettes, Lamb said.
“I know a handful of college students who already smoke the cheapest things they can get their hands on because they’re so broke,” she said. “Either they would make the sacrifice to smoke or they would just cut back.”
Starkville resident Blake Brockner said he is fine with either of the two proposed directions for the tax revenue.
“If they were going to increase the taxes regardless, then that [car tags and education] would be the best places to put them,” he said.
Burton said the cigarette tax increase would not be a cure for the state’s budget cuts.
“I think we have to be creative. We only have limited funds, even with the cigarette tax increase,” he said. “We’ve got to be very careful.”