Miss. Considers Slicing Grocery Tax

The Associated Press
Wednesday, March 7, 2007; 9:43 AM

GREENVILLE, Miss. -- Mollie Hudson, a social worker, has some hungry boys to feed and a pocketbook that can barely keep up.

Her 20-year-old son is in college and comes home for weekend meals, and her 10-year-old is a robust fifth grader who can eat almost as much as his big brother.

"The grocery bill is one of the biggest expenses of the month," said Hudson, 40, who makes a big shopping trip once a month, spending $120 to $150, and then smaller trips about once a week, spending about $60 to $70.

Hudson and her fellow state residents are finding themselves in a financial pinch: They pay the highest taxes on groceries, yet rank among the lowest paid households in the nation.

"For the poorest state in the nation to have the highest sales tax on groceries is cruel," said state Sen. Alan Nunnelee, a Republican who hopes to address the imbalance by cutting the grocery tax.

Proponents of a cut are keenly aware of what's happening on the other side of the Mississippi River. In neighboring Arkansas, where household incomes also are among the lowest in the country, the new Democratic governor, Mike Beebe, signed a law last month that will cut the grocery tax in half on July 1, from 6 percent to 3 percent.

But a similar measure before the Mississippi Legislature is barely alive. The bill would slice the grocery tax in half _ but it would also increase the cigarette tax from 18 cents a pack, the third-lowest in the nation, to $1 a pack, about the national average.

Republican Gov. Haley Barbour opposes the bill and he vetoed two cigarette-grocery "tax swap" bills in 2006, which lawmakers failed to override. "I'm against raising anybody's taxes," Barbour says consistently when asked about the legislation this year.

Critics say Barbour is protecting the tobacco companies that helped make him wealthy when they were clients of Barbour Griffith and Rogers LLC, the Washington lobbying firm he founded and ran before winning the governorship of his home state in 2003.

Barbour is seeking a second term this year and says he doesn't want to change the grocery tax rate while the state still faces economic uncertainty 18 months after Hurricane Katrina.

The governor has powerful allies on the tax swap issue. Republican Sen. Tommy Robertson, chairman of the Senate Finance Committee, said he's "99.9 percent sure" he'll kill the legislation. Like other opponents, Robertson argues that the poorest families pay no grocery tax because their food stamp purchases are tax exempt.

Health advocates, state Democratic leaders and even Republican Lt. Gov. Amy Tuck support the tax swap and argue the lower grocery tax would help the state's working poor.

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