Negotiations to raise the state’s cigarette tax inched forward Wednesday as lawmakers braced for another round of bad economic news that could prompt more budget-trimming.
House and Senate negotiators met briefly but came to no agreement on how high to raise the 18-cent tax or how to spend the revenue. They’ll meet again today.
Lawmakers crafting the state budget are hoping the tax hike will limit future damage to agencies that have had to cut $200 million in the current fiscal year. Revenue forecasts are expected to dip sharply when lawmakers meet Friday to revise their earlier estimates of how much money the state will receive to continue providing services.
“The picture’s not pretty,” Senate Appropriations Committee Chairman Alan Nunnelee told his colleagues earlier this week. He said he is waiting to see whether Medicaid funding negotiations produce a hospital tax increase.
Adding to the uncertainties are questions over $2.8 billion in federal stimulus funds expected to arrive in Mississippi. Spending requirements and timelines for receiving the money are vague, and Gov. Haley Barbour has said the state still will need to reduce spending to offset expected revenue shortfalls in 2010 and 2011.