| House passage of SB 2310 sent the measure to Gov. Barbour for his signature. The bill also would hike the excise tax on cigarettes sold in the state by 75 cents per pack on July 1, 2006, then by $1 a pack on July 1, 2007. Mississippi’s current tax of 18 cents per pack is among the lowest in the U.S.
Under the plan, the state’s 7 percent tax on grocery items would be reduced to 4.5 percent on July 1, 2006, and then cut again each year until it is completely phased out in 2014. Municipalities losing revenue from the grocery tax cut would be compensated out of a fund generated by the tobacco tax.
The vote in both the House and Senate was strong enough to override a veto by Barbour, should he decide to take that action. Barbour earlier indicated he was against the bill. Mississippi is one of only 12 states in the nation still charging a tax on groceries. Some states have a reduced rate on groceries, while 30 states have exempted grocery items totally from their tax structure. Louisiana was the last state, in 2002, to eliminate its sales tax on food.
Moves to eliminate the tax in Mississippi have failed over the years, the last in 1992. Proponents noted it will help those on fixed incomes who often must choose between buying drugs or food.
Barbour used part of his "State of the State" address on Jan. 9 to lobby members of the Legislature against voting for the tobacco tax increase/grocery tax decrease. He said that he has never favored raising "anybody’s taxes" and added that "this isn’t the time to reduce revenue by cutting taxes."
The governor spent much of his 45-minute speech talking about the state’s response to Hurricane Katrina and praising citizens for their resilience against the great odds brought on by the worst disaster to ever hit this country.
OTHER ACTION LAST WEEK in the House of Representatives involved these matters:
||HB 191 was passed to provide funding for 8th round of the Rural Fire Truck Program, established in 1995, which has provided more than 400 fire trucks to counties in the state and helped to reduce citizens’ insurance costs.
||HB 409 was passed to permit a $25 misdemeanor fine for the non-use of a seat belt in a motor vehicle, making it a "primary" rather than "secondary" offense, meaning a law officer can stop someone solely for not using the safety device. It will affect only front-seat passengers, or a child between 4 and 8, regardless of where the child is seated. Mississippi stands to gain $8.7 million in federal funds for instituting the law, which can be used for highway infrastructure needs and safety and educational programs.
We heard a report from state fiscal experts who said tax revenues have remained strong in Katrina’s wake, with collections about $80 million above estimates for the fiscal year to date, despite the shutdown of Coast gaming operations since Katrina. The state economist said jobs are coming back, after heavy losses to the disaster, and that Coast retail sales are booming. He even predicted Mississippi’s economy will grow faster this year than the nation’s economic growth.
Their report indicated the Legislature will have $4.13 billion to spend on General Fund programs in FY 2007 beginning July 1, with a total budget including federal and special funds of $13.5 billion.
On another disaster-related matter, the state emergency preparedness director said his agency needs beefing up to get ready for the next disaster. He said a major need is a statewide wireless communications system. The agency also needs more staffing to more adequately prepare. We will soon be dealing with an appropriation for that agency.
Yesterday was our first major deadline of the session, Jan. 16, for the introduction of bills and constitutional amendments. The deadline for committees in each chamber to act on those measures is Jan. 31, with Feb. 9 the deadline for original floor action on those bills.