Tax bill: Senators choose tobacco over food

Remember Gov. Haley Barbour and 20 members of the state Senate when you go to the grocery store because they will be right there with you.

When you are standing in that checkout line and the bill is totaled, look at the last item. It is the 7 percent sales tax added to your bill. Had these 20 senators not joined with the governor Wednesday in supporting his veto, that tax bill would have been cut in half and you would be leaving the store with more money in your pocket.

Because of Gov. Barbour and this group of 20 senators, you will continue to pay the highest sales tax on food in the country. While many states have moved to remove or reduce this most regressive tax, these senators have decided Mississippians need to pay it.

Why? Just look up from your grocery bill and you will see. Just glance over at the rows of cigarette cartons behind the cashier. Because of Gov. Barbour and these 20 senators, the Big Tobacco companies selling those cigarettes will get the tax break you might have gotten. They will continue to enjoy the second lowest tax in the country.

The Senate's failure to support Lt. Gov. Amy Tuck's progressive tax swap plan is a setback to families.

This bill should have passed. Mississippi, the poorest state in the nation, has no business charging the highest sales tax on food. Mississippi has no business having a tax policy that gives the break to a product that is harmful and ends up costing all taxpayers, smokers or not.

Gov. Haley Barbour and these 20 senators had a clear choice and they chose tobacco instead of food. They chose a tax policy that favors tobacco companies over families. It was a bad choice.

So, remember these senators when you go to the grocery store. Cut this out and put it on your refrigerator at home so you can think of them while you are putting up the milk and the eggs. Because of them, you just paid more for your food than you should.

And, it's a crying shame.

 

ROLL CALL VOTE

The Mississippi Senate on Wednesday, on a 29-20 vote, failed to override Gov. Haley Barbour's veto of a bill that would have increased the cigarette tax and cut the state sales tax on food in half, from 7 percent to 3 1/2 percent.

The vote would have taken 33 votes to prevail and allow the bill to become law.

Voting to override the governor's veto were (29): Sens. Nickey Browning, D-Ecru; Terry Burton, R-Newton; Hob Bryan, D-Amory; Kelvin Butler, D-Magnolia; Videt Carmichael, R-Meridian; Deborah Dawkins, D-Pass Christian; Bob Dearing, D-Natchez; Hillman Frazier, D-Jackson; Tommy Gollott, D-Biloxi; Jack Gordon, D-Okolona; Alice Harden, D-Jackson; Cindy Hyde-Smith,D-Brookhaven; Gray Jackson, R-French Camp; Robert Jackson, D-Marks; Sampson Jackson, D-DeKalb; David Jordan, D-Greenwood; Tom King, R-Petal; Ezell Lee, D-Picayune; Travis Litte, R-Corinth; Nolan Mettetal, D-Sardis; Alan Nunnelee, R-Tupelo; Lynn Posey, D-Union Church; Tommy Robertson, R-Moss Point; BillyThames, D-Mize; Joseph Thomas, D-Yazoo City; GrayTollison, D-Oxford; Bennie Turner, D-West Point; Johnnie Walls, D-Greenville; Gloria Williamson, D-Philadelphia.

Voting against the override were (20): Sens. Sidney Albritton, R-Picayune; Mike Chaney, R-Vicksburg; Eugene Clarke, R-Hollandale; Scottie Cuevas, D-Pass Christian; Doug Davis, R-Hernando; Ralph Doxey, D-Holly Springs; Merle Flowers, R-Southaven; Billy Hewes, R-Gulfport; John Horhn, D-Jackson; Dean Kirby, R-Pearl; Perry Lee, R-Mendenhall; Walter Michel, R-Jackson; Tommy Moffatt, R-Gautier; Ed Morgan, R-Hattiesburg; Stacey Pickering, R-Soso.; Charlie Ross, R-Brandon; Willie Simmons, D--Cleveland; James Walley, D-Leakesville; Richard White, R-Terry; J.P. Wilemon Jr., D-Belmont.

Absent or not voting (2): Sens. Terry Brown, R-Columbus; Bunky Huggins, R-Greenwood.

Tax swap

Big Tobacco 1, Miss. Families, 0

TAX BREAK   Voters should call their senator at (601) 359-3770 and say they want a tax break on food.

Following the Mississippi's Senate's failure Wednesday to override Gov. Haley Barbour's veto of a tax swap on food and tobacco, it's Big Tobacco 1, Mississippi Families, 0.

Senate Bill 2310 that Barbour had vetoed and the Senate on Wednesday fell six votes shy of overriding, 28-22, was the more up-or-down version of two bills for a tax swap.

It would have increased the cigarette tax to 75 cents in July and $1 the next year. It also would have phased out the 7 percent grocery tax by 2014. It originally passed the Senate by a veto-proof 36-15 vote, two more than needed for an override.

Senators who flip-flopped on approving SB 2310 are hiding behind Barbour's stance that tax revenue figures are unreliable and can't prove that it won't harm tax collections in small towns. But many who initially opposed the bill for those reasons now say they are satisfied with Senate Bill 3084, a measure crafted to address Barbour's concerns.

Barbour has also vetoed Senate Bill 3084 that would raise the cigarette tax to $1 per pack over two years and cut the state's 7 percent grocery tax in half. It next could be up for an override vote. And senators who flip-flopped on SB 2310 won't have anywhere to hide if they flip-flop again. Stay tuned; that vote could come today.

Either bill would save Mississippi families hundreds of dollars per year on taxes spent on food they could have used (and been taxed on) for other items, such as children's clothing, rent or gasoline.

Mississippi, the poorest state, now has the highest grocery tax in the nation and one of the lowest cigarette taxes.

Shifting the food tax to the cigarette tax would help deter young people from taking up the smoking habit and would have helped reduce the millions of tax dollars Mississippians now pay on smoking-related health care.

But 22 senators voted for keeping cigarette taxes low and grocery taxes high:

Sens. Sidney Albritton R-Picayune; Terry Brown, R-Columbus; Videt Carmichael, R-Meridian; Mike Chaney, R-Vicksburg; Eugene Clarke, R-Hollandale; Scottie Cuevas, D-Pass Christian; Doug Davis, R-Hernando; Ralph Doxey, D-Holly Springs; Merle Flowers, R-Southaven; Billy Hewes, R-Gulfport; John Horhn, D-Jackson; Dean Kirby, R-Pearl; Perry Lee, R-Mendenhall; Walter Michel, R-Jackson; Tommy Moffatt, R-Gautier; Ed Morgan, R-Hattiesburg; Stacey Pickering, R-Soso; Charlie Ross, R-Brandon; Willie Simmons, D-Cleveland; James Walley, D-Leakesville; Richard White, R-Terry; J.P. Wilemon Jr., D-Belmont.

Six senators voted originally for the tax break on groceries, but flip-flopped to support the governor's veto.

The flip-floppers are: Sens. Albritton, Carmichael, Chaney, Horhn, Lee, Simmons and Walley. Voters should ask them why they would want to keep the sales tax on groceries high and tobacco taxes low.

(On the Web: See Senate Bill 3084: http://billstatus.ls.state.ms.us/2006/html/select.htm)

Text of governor's veto message

Special to The Clarion-Ledger

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20060315/NEWS/60315013

TO THE MISSISSIPPI STATE SENATE:

I am returning SB 3084: "AN ACT TO AMEND SECTION 27-69-13, MISSISSIPPI CODE OF 1972, TO INCREASE THE EXCISE TAX ON CIGARETTES; TO AMEND SECTION 27-65-75, MISSISSIPPI CODE OF 1972, TO INCREASE THE PERCENTAGE OF SALES TAX COLLECTED ON RETAIL SALES OF SUCH FOOD WITHIN MUNICIPALITIES THAT IS DISTRIBUTED TO MUNICIPALITIES, AND TO REQUIRE A PORTION OF THE MONTHLY TOBACCO TAX REVENUE TO BE DEPOSITED IN THE EDUCATION ENHANCEMENT FUND AND THE SCHOOL AD VALOREM TAX REDUCTION FUND; TO AMEND SECTION 27-69-31, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A DISCOUNT ON THE ADDITIONAL FACE VALUE OF STAMPS PURCHASED TO COMPLY WITH CERTAIN CIGARETTE EXCISE TAX INCREASES; TO CREATE A NEW SECTION 27-65-26, MISSISSIPPI CODE OF 1972, TO IMPOSE A SEPARATE SALES TAX LEVY ON RETAIL SALES OF CERTAIN FOOD FOR HUMAN CONSUMPTION AND TO REDUCE THE SALES TAX RATE ON SUCH FOOD; TO AMEND SECTION 27-65-17, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; TO IMPOSE A FEE ON NONSETTLING-MANUFACTURER CIGARETTES; TO REQUIRE MONTHLY REPORTING OF THE NUMBER AND DENOMINATION OF STAMPS AFFIXED TO PACKAGES OF NONSETTLING-MANUFACTURER CIGARETTES, THE NUMBER OF INDIVIDUAL PACKAGES OF NONSETTLING-MANUFACTURER CIGARETTES SOLD OR PURCHASED IN THIS STATE OR OTHERWISE DISTRIBUTED IN THIS STATE FOR SALE IN THE UNITED STATES AND ANY OTHER INFORMATION THE STATE TAX COMMISSION CONSIDERS NECESSARY OR APPROPRIATE TO DETERMINE THE AMOUNT OF THE FEE IMPOSED BY THIS ACT OR TO ENFORCE THIS ACT; TO REQUIRE REGISTRATION OF NONSETTLING MANUFACTURERS WITH THE ATTORNEY GENERAL; TO REQUIRE DEVELOPMENT, MAINTENANCE AND PUBLICATION BY THE ATTORNEY GENERAL OF A LIST OF NONSETTLING MANUFACTURERS THAT HAVE CERTIFIED THEIR COMPLIANCE WITH THIS ACT; TO PROVIDE FOR ENFORCEMENT OF THE REQUIREMENTS IMPOSED BY THIS ACT; TO GRANT PROTECTIONS FROM CIVIL LIABILITY TO NONSETTLING MANUFACTURERS THAT COMPLY WITH THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES" without my approval and assign the following reasons for my veto.

After full consideration, I am vetoing Senate Bill 3084, which proposes to reduce the sales tax on groceries and increase the tax on cigarettes. Senate Bill 3084 is the latest attempt by the Legislature to change the state revenue stream in the middle of tremendous financial uncertainty in the wake of Hurricane Katrina. Reliable, accurate information needs to be developed through proper research before such a tax shift is enacted, but this research has not been done.

In the first week of this session of the Legislature, the Senate passed Senate Bill 2310, with the promise of revenue neutrality for the state General Fund and for our cities and towns, and the House soon followed. Before I could act on this bill, the House Ways and Means Committee realized the claim was inaccurate and passed House Bill 1140 to increase the level of reimbursements to the municipalities, at the expense of the General Fund. However, even the higher reimbursements of House Bill 1140 were not enough to keep the municipalities whole.

I vetoed Senate Bill 2310 on January 18, 2006, because it would have resulted in a loss of some $1.5 billion revenue to the state over nine years and would have cut sales tax revenues to municipalities by more than $150 million over nine years. These revenue losses would have inevitably led to lower funding for education and basic services as well as to tax increases, ranging from municipal ad valorem taxes to sales tax increases on products other than groceries to higher income taxes.

After I vetoed Senate Bill 2310, the Senate passed the first version of Senate Bill 3084, again with the claim of revenue neutrality for both the state General Fund and for our cities and towns. The same day, the House passed a different proposal, House Bill 1634, also claiming revenue neutrality. To the credit of the House, House Bill 1534 was the first of the four pieces of legislation which actually held municipalities harmless from the effects of the risky tax swap. However, this was achieved by an increased diversion from the General Fund, and therefore, a larger reduction in state revenue.

The conference report of Senate Bill 3084 is now the fifth version of the tax swap the Legislature has considered, and its proponents again claim it is revenue neutral. This legislation would cut the sales tax on groceries from 7% to 31/2%; increase the excise tax on a pack of cigarettes from 18 cents to 80 cents on July 1, 2006, and from 80 cents to $1 on July 1, 2007; and establish an additional fee of 43 cents/pack on cigarettes produced by manufacturers which did not participate in the tobacco settlement in the 1990's, in exchange for immunity from future lawsuits. The fee on the non-settling manufacturers would increase each year by at least 3%.

Senate Bill 3084 as sent to me is not revenue neutral. It will result in lost revenue to the General Fund, and the revenue reduction will increase in the out years. In this time of financial uncertainty, when we continue to seek additional federal assistance to help us recover and rebuild from Katrina, it is irresponsible to cut our own tax revenue, no matter how well intentioned.

In each version of these tax proposals, the supporters of the tax swap concept promise revenue neutrality, but they still do not take into account factors which will cause a net revenue reduction over time. The Legislature is relying on figures supplied by the State Tax Commission, but as its Chairman has pointed out repeatedly, the State Tax Commission has no expertise in estimating future revenue growth rates. Therefore, its estimates are in current dollars and do not take into account the fact that Senate Bill 3084 would replace a growing revenue source (sales tax on groceries) with a declining revenue source (cigarette tax).

For example, when the supporters of this bill claim it is revenue neutral, they claim the sales tax on groceries will generate the same amount of revenue five years from now as it generates today. The possibility of that happening is virtually zero. Sales tax collections have increased 5% each year over the last ten years.

When the supporters of this bill claim it is revenue neutral, they claim that a 10% increase in cigarette prices will cause a 4% reduction in taxable packs sold. However, they do not take into account the recent history of declining smoking rates in Mississippi and across the country. Last week the Washington Post reported that "Americans smoked fewer cigarettes last year than at any time since 1951, and the nation's per capita consumption of tobacco fell to levels not seen since the early 1930's." Nationally, smoking declined 4.2% in 2005 alone and declined 20% in the last six years.

Cigarette smoking and tax revenue have been declining in Mississippi in recent years, with no change in the tax. Cigarette smoking and tax revenue from cigarette sales will decline at a much faster rate if the tax is raised as proposed in SB 3084. Indeed, that is the chief goal of many of the bill's supporters, which is a worthy goal. Yet the legislative proponents greatly underestimate this reduction in tax revenue, which must explain why no fiscal note for the bill, setting out the revenue estimate, was provided beyond years one and two. Every year going forward the reduction in revenue - the loss to the state's programs - will be greater and greater. This is bad policy, especially now.

Last week, when I testified before the Senate Appropriations Committee about Mississippi's needs to recover and rebuild from Katrina, I was asked if our state has cut its taxes and its state revenue in the aftermath of the hurricane. I was told publicly this question had been asked of the Committee. Because of my veto of SB 2310, I truthfully answered that we had not cut our taxes or our revenue. After today's veto, that
answer will still be accurate.

Beyond all the other reasons I've mentioned, this bill must be vetoed if we are to have any credibility when we seek the assistance of the federal government and the American people in our recovery and rebuilding. Any legislator ought to recognize that is true.

I remain opposed to raising anybody's taxes, but even those who disagree should see why this bill must be vetoed.

If the Legislature would like to have a study to determine the details of our revenue collections, I will go along. The fact is, the State Tax Commission has consistently said it does not even know the amount of sales tax collected on groceries today, so it (and no one else) cannot say if a different revenue stream would be sufficient to replace the sales tax on groceries.

Knowing the facts is critical before making a decision that involves hundreds of millions of dollars a year - money that citizens depend on for schools, colleges, law enforcement and other state services. Knowing the facts is even more crucial in a time of uncertainty, in which we Mississippians find ourselves.

We do not need to add to that uncertainty by enacting the latest version of a tax scheme just because it may be politically popular.

For these reasons, I urge the members to sustain the veto and reject Senate Bill 3084.

The Clarion-Ledger Newspaper
Jackson, Mississippi
http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20060201/OPINION/602010361&SearchID=73234677657670

February 1, 2006

Mike Sawyer has letter to editor in the Clarion-Ledger newspaper

Miss. tobacco tax hike try courageous

Thanks from an outsider who has been fatherless by tobacco since age 11 for your continuing editorial support for the new tobacco tax to replace your food and grocery tax ("City budgets: Mayors should not wreck tax shift," Jan. 26).

Mike Sawyer took this picture on the Blue Grass Parkway near Versailles, Kentucky on February 3, 2006

Mike Sawyer on February 4, 2006

Please share your thoughts with  Mike Sawyer  for this others to read on this site.
 

Tobacco terrorizes 450,000 Americans to death every year per the federal CDC