The Clarion-Ledger, 1/9/9

Mississippi lawmakers began trying to raise new revenue Thursday with a proposed 82-cents-a-pack cigarette tax increase as state agencies prepared for deeper budget cuts that could affect more services, including Medicaid and schools.

Legislation raising the 18-cent tobacco tax to $1 per pack cleared a key House committee hours after Gov. Haley Barbour announced lagging revenues will force a second round of budget-trimming. House Bill 364 may be considered by the full chamber today. It must pass by a three-fifths vote before it can head to the Senate.

“With our government needing revenue, where else can we get it?” said House Ways and Means Committee Chairman Percy Watson, D-Hattiesburg, as he encouraged his colleagues to support the tobacco tax hike.

No decisions have been made on the depth of the cuts, although all agencies are expected to be affected. Barbour is waiting to see how much impact corporate tax returns will have on a current budget that is $65.2 million below estimates.