Tobacco Tax Increase Takes Effect

After a three-year tobacco tax increase effort, AARP Mississippi recently saw Gov. Haley Barbour sign House Bill 364—a 50 cent increase—into law. Funds from the tax go into the state’s general budget and may benefit Medicaid. As of May 15, the state’s 18-cent tobacco tax rose to 68 cents per pack.

The state’s excise tobacco tax was the third lowest in the country and had not changed since 1985. Gov. Barbour is a former tobacco lobbyist who vowed never to raise taxes.

Over the last three years, AARP and its coalition collaborators supported bills that would have increased the tobacco tax and decreased the food tax. About 4,700 Mississippians die every year of smoking-related illnesses. Smoking-related illnesses cost the healthcare system about $719 million a year.

An AARP survey found that 85 percent of registered Mississippi voters who were called wanted to see a 50 percent decrease (45 percent) or total elimination (40 percent) of the state’s sales tax on food.

To raise awareness, AARP led an accountability campaign that included forums and media outreach in state House and Senate districts of lawmakers who previously voted against the bill. As a result, eight legislators lost elections, including a key state Senator who had blocked previous tobacco tax increase legislation.

This new tax is estimated to generate more than $113 million for the year that began July 1. Legislators said revenue from the tax would replenish a fund that helps lower the cost of car license tags and could possibly help pay for other state services, such as the state’s Medicaid match.