Stage set for override of Barbour’s second tax veto|[3/16/06]

Published 12:00 am Thursday, March 16, 2006

From AP and staff reports.

JACKSON – Gov. Haley Barbour has set the stage for override attempts in the House and Senate with his expected veto Wednesday of the second bill this year to lower the nation’s highest state sales tax on groceries and raise one of the lowest taxes on cigarettes.

The plan’s supporters said it would have no effect on the state budget but would help working families.

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Barbour called it a &#8220risky tax swap” and said there are no reliable numbers about how it might affect the budget as Mississippi recovers from Hurricane Katrina.

&#8220This 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,” said Barbour, a Republican and former Washington lobbyist for tobacco companies.

State Rep. Chester Masterson, R-Vicksburg, agreed with the governor’s position. Masterson, a retired physician, said he would have supported an increase in tobacco taxes as he has in the past, but not risk the state losing revenue overall.

&#8220We are in an unsure situation with amount of money we’ll have to come up with to match the Katrina relief funds,” Masterson said after the veto. &#8220This is no time for it. It puts our congressmen in a bad light when we ask them for money and then we lower a tax.”

Sen. Mike Chaney, R-Vicksburg, is seen as holding a key vote in the Senate, where an override would be razor close. He voted for the initial legislation, but said he hasn’t made his mind up about how he’ll cast his ballot if an override is attempted.

&#8220I haven’t read the governor’s veto message,” Chaney said.

Rep. George Flaggs, D-Vicksburg, supported both tax swap bills and would likely vote to override, he said, but identified full funding of education as more important.

Flaggs said this morning he may introduce a bill in the 2007 session to raise the cigarette tax with revenue directed to schools. &#8220We have this phenomenal growth in revenue, but we’re not prioritizing our funding,” Flaggs said. Wednesday, the Joint Legislative Budget Committee raised by more than $200 million the official estimate of the state’s income.

Tobacco tax increases have been attempted annually by stop-smoking groups. Matthew L. Myers, president of the Washington-based Campaign for Tobacco-Free Kids, said the veto shows Barbour is &#8220Big Tobacco’s best friend.”

&#8220Nowhere in America has a politician done so much to help the tobacco industry at the expense of the people who elected him,” Myers said in a written statement.

Republican Lt. Gov. Amy Tuck proposed the tax changes, saying the current 7 percent sales tax on groceries is &#8220cruel and regressive.”

&#8220When you cut taxes, then that’s going to help stimulate the economy,” she said.

Barbour’s veto came on the last day for him to act against the bill or let it go into effect without his signature. There was no immediate indication if or when an override might be attempted. The regular session ends in less than three weeks.

The bill proposed cutting the sales tax in half for groceries and increasing the 18-cents-a-pack cigarette excise tax to 80 cents, then to $1.

The proposed increase in revenue from cigarettes was not earmarked, but health advocates touted the tax increase as a way to reduce tobacco use and decrease the amount of money Mississippi pays to care for sick smokers.

&#8220People have to eat. People don’t have to smoke,” said Jennifer Cofer, division director of programs for the American Lung Association of Mississippi.

The state Tax Commission estimates that Mississippi collected about $345 million last year in grocery taxes. That’s less than 1 percent of nearly $3.8 billion in tax collections.

The Tax Commission also says the state collected $46.3 million in cigarette excise taxes.

Lawmakers had estimated that cutting the grocery tax in half and setting the cigarette excise tax at $1 a pack would’ve put collections from both categories at roughly the same level – just over $170 million.

Grocery tax collections dropped sharply in some Gulf Coast communities after Hurricane Katrina wiped away stores.

The bill had passed the House 87-34 on Feb. 24 and the Senate 29-19 on March 3.

An override would take 82 votes in the House if all 122 members are voting and 34 votes in the Senate if all 51 are participating. One Senate seat is vacant.

A bill Barbour vetoed in January would have eliminated the grocery tax over several years and increased the cigarette tax to $1 a pack.

The Mississippi Municipal League, using figures provided by the governor, said the first bill would’ve hurt local budgets. Cities receive a portion of the taxes collected on groceries and other items sold within their boundaries.

Lawmakers never tried to override the veto of the first bill. An effort would’ve had to start in the Senate because the bill started there. Tuck, the Senate’s presiding officer, said there weren’t enough votes to reach the two-thirds majority for an override. Some senators, including Chaney, who voted for the first bill later changed their position and said they’d support Barbour.

The second bill was filed to address concerns about city budgets.

Barbour has said repeatedly that he opposes any tax increases.

&#8220I hope before I finish being governor that we will be in a position where we can cut taxes,” Barbour said Wednesday.

He is expected to seek a second term next year.