Chaney again defends vote on grocery tax|[5/18/06]
Published 12:00 am Thursday, May 18, 2006
Lack of credible information on the state’s annual take from levies collected on groceries was the chief reason for switching his position on the failed attempt to lower it and raise taxes on cigarettes in the same bill, state Sen. Mike Chaney said Wednesday.
Addressing the Vicksburg Lions Club, Chaney said the vote was one of his toughest in 13 years in the Legislature and repeated Gov. Haley Barbour’s statement by calling it a “tax scheme.”
“I call it that because that’s what it ended up being,” Chaney said, defending his vote against overriding Barbour’s second veto of the bill.
Initially, the measure would have cut the state’s 7 percent grocery tax in half, then phased out the remaining 3.5 percent over several years. It also would have raised the cigarette excise tax to 75 cents a pack this July 1 and $1 a pack a year later.
Mississippi’s grocery tax is the highest in the nation, while the cigarette tax is among the lowest.
The second bill that Barbour vetoed would have cut the grocery sales tax in half and increased the cigarette excise tax to 80 cents a pack this July 1 and to $1 a pack a year later.
In March, the Senate voted 28-22 in favor of an override of that veto. However, it was six votes shy of the 34 needed for a two-thirds majority. Chaney was among seven senators who supported the bill but went against the override.
Chaney, 62, said he disputed figures supplied to legislators from the Mississippi State Tax Commission that estimated the state took in $345 million from grocery taxes.
“We’re not sure that’s the right number,” Chaney said, adding that he did his own research on the issue by contacting tax commissioners in states that had recently hiked taxes on cigarettes, naming Arizona and New Mexico as examples.
Officials there reported that sales “plummeted,” Chaney said, admitting those states had issues Mississippi did not, such as multiple Indian reservations where no federal taxes were paid.
Chaney seemed more confident of the state’s cigarette tax revenue, a figure he put at $43 million.
Those revenues have been falling at about 1 percent a year for a decade, Chaney said.
Bills filed that would require the tax commission to provide figures to the legislature on actual taxes collected from groceries have died in the Senate Rules Committee the past two sessions, Chaney said.
Chaney indicated that he would support raising the cigarette excise tax as a stand-alone measure in the 2007 session. But, despite a personal desire to see it cut to 5 percent, he called the grocery tax “an argument on two sides.”
“Whereas some people say that the only tax some people pay is the grocery tax, others say it’s an unfair tax that should be reduced.”
Other legislation on which he updated Lions members was Katrina-related, one being building code regulations geared to protect homes in coastal counties from hurricane-related storm surge. The other was funding reconstruction of storm-damaged highways along the coast.
On other issues, Chaney, who chairs the education committee and sits on nine others including appropriations, said it was crucial to keep colleges and universities funded to head off any further tuition increases.
Last month, the state College Board announced tuition increases between 4.5 and 5.5 percent at Mississippi’s eight public universities.
“The consequences of not funding (universities) is very simple. They have only two places they can get money, donations and tuition increases,” Chaney said.
The $98 million restored to higher education put them only to 1999 levels, Chaney said.