JACKSON, MS -- The Mississippi House and Senate have sent a measure to Gov. Haley Barbour (R) that would increase the state’s current cigarette excise tax of 18 cents-per-pack to 75 cents-per-pack. However, Barbour isn’t so sure increasing taxes is the answer to increasing state revenue.

The Washington Post writes that Barbour is opposed to tax increases and is concerned that phasing out the state’s 7 percent grocery tax, also contained in the bill, would add to the state’s revenue losses--especially while the state is still recovering from Hurricane Katrina.

The governor’s spokesman Pete Smith told the newspaper that his boss is against possible revenue losses “at a time when the state is recovering from Hurricane Katrina,” adding that a boost in cigarette taxes while phasing out the grocery tax, at this time, “may not be prudent.”

The bill sent to Gov. Barbour would phase out the state's 7 percent tax on groceries to 4.5 percent on July 1 and eliminate the tax by 2014. The bill would increase the state's cigarette excise tax of 18 cents-per-pack to 75 cents-per-pack in July and add another 25 cents-per-pack in mid-2007.

Because the bill passed both chambers with strong margins, the potential to override a gubernatorial veto is likely, notes the Post. 

Meanwhile, Indiana Gov. Mitch Daniels (R) announced intentions to boost the state’s current cigarette excise tax of 55.5 cents-per-pack to 80.5 cents-per-pack during his State of the State speech on January 11.

According to the Associated Press, Republicans have shown “little support” for the governor’s plan, and top Democrats are questioning what the extra tax revenue would actually support.

During his speech, Daniels called Indiana one of the most “unhealthy states,” and said that reducing the number of smokers would be the “biggest step to improve wellness.”

“This is a health matter. It’s not about money or taxation,” Daniels said.

State Rep. Jeff Espich (R-Uniondale) told the AP that election-year politics “would make a tax increase difficult to pass,” adding that House Republicans have no interest in raising taxes.

Similar to his 2005 agenda, Iowa Gov. Tom Vilsack (D) is again pushing his 80-cent-per-pack cigarette excise tax increase. According to the Quad-City Times, Vilsack says that boosting the state’s cigarette tax rate would “help save lives and help small businesses afford catastrophic healthcare coverage for their workers.” The governor unveiled his 2006 legislative priorities during a tour of the local Alcoa plant on Jan. 12.

“I think this is one tax that people genuinely think ought to be increased,” said Vilsack, noting that the state has one of the lowest cigarette excise tax rate in the United States at 36 cents-per-pack. He is also proposing to increase the state’s current excise tax on beer because Iowans complain that cigarettes are generally the “sole target of such hikes.”