SPRING 2007

 

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Contents

Mark Olson Speaks at Fall 2006 Forum

Mark OlsonThe Else School of Management was pleased to present Mark W. Olson, Chairman of the Public Company Accounting Oversight Board (PCAOB) as the featured speaker for the Fall 2006 Forum.  The PCAOB is a private-sector, non-profit corporation created by the Sarbanes-Oxley Act of 2002 to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.  Prior to becoming chairman of the PCAOB, Mr. Olson served as a member of the Federal Reserve Board of Governors and the Federal Open Market Committee.

Mr. Olson discussed the role of the PCAOB in American business and the impact of the Sarbanes-Oxley Act on regulation.  He also discussed ethical responsibilities of public corporations.  Following the Forum, Mr. Olson met with accounting, economics, and finance students from colleges and universities around the state.  The students then attended a panel discussion featuring Blake Murphy, Director of Accounting Compliance at Trustmark Corporation;  Mandy M. Pope, Senior Vice President at Parkway Properties, and Scott Telhiard, Assistant Controller of Cal-Maine Foods, Inc. 

The Fall Forum and corresponding events sponsored by The Clarion Ledger and Horne LLP.

Spring 2007 Forum Addresses Tobacco Legislation in Mississippi

On January 24, the Else School of Management presented its Spring 2007 Forum, “Up in Smoke:  Is Anti-Tobacco Legislation Good for Mississippi?”.  The Forum, sponsored by The Bower Foundation, The Clarion Ledger, Methodist Rehabilitation Center, and the Mississippi State Medical Association, featured panelists J. Edward Hill, M.D., Senator Charlie Ross, Matthew Steffey, and William M. “Marty” Wiseman.  These four panelists presented arguments for and against 2007 legislation that proposes to raise the cigarette costs in Mississippi by $1 a pack.

“Raising the tax on cigarettes by $1 a pack is not an option—it is a necessity. It is not only sensible, but it is ethical,” said J. Edward Hill, M.D., a board-certified family physician from Tupelo who is a past president of the American Medical Association.

And while Ross, who serves as Senator from District 20 and chairman of the Judiciary A Committee, agreed that smoking is harmful, he pointed out that the proposal to increase costs by $1 per pack is a 455% tax increase.

“This is a huge tax increase for lawmakers who ran on the ‘no increase in taxes’ platform. All my colleagues in the legislature know this is an important public policy issue, and we want to get it right,” he said.

Last year, the Senate and the House passed Senate Bill 3084, which raises cigarette taxes to $1 and eventually removes the sales tax on groceries. The measure was vetoed by Governor Haley Barbour.

“With regard to the tax swap issue, last year we were given one day to vote on a measure that would greatly affect revenue. No numbers were presented that would show the amount of money that would be lost if the grocery sales tax was reduced,” Ross explained.

“Over the past three years, our emphasis has been on getting our budget back in shape. It has taken a lot of blood, sweat, and tears, but we now have a slight surplus. We don’t want to do anything to set ourselves back. We need to look closely at all the data so that we can accurately assess what kind of revenue would be lost in our municipalities.” He concluded that a wise move may be in splitting the two issues into separate bills.

Wiseman, director of the John C. Stennis Institute of Government at Mississippi State University, prepared the Executive Summary Report that focused on tobacco and food taxation policy options in the state. His report estimates that the $1 per pack increase should generate $185 to $197 million in additional revenue and finds that the increase will compensate for a 50% reduction in grocery sale taxes.

In 2004, smoking-attributable health-care costs in Mississippi reached $662 million. “Statistics like these prove that a tobacco tax increase is not so much a tax but instead a user fee on our health care system,” Wiseman said.

Mississippi has not raised its cigarette tax, 18 cents per pack, since 1985; this is significantly below the national average of 96 cents per pack.

Matthew Steffey, a professor of law at the Mississippi College School of Law, tempered the discussion with views from a constitutional standpoint, stating “there is no fundamental constitutional right to smoke cigarettes, to sell cigarettes or to grow tobacco.”

He emphasized the need to discourage teenagers from ever beginning to smoke: “While there is social good in allowing people to make their own choices, it is usually not 30-year-olds who have taken up smoking for the first time. Teenagers are the target, and they are not the ones who are helping bear the public health costs.  Some people will pay almost any price for cigarettes, but teenagers are very price-sensitive. Raising the cost has the greatest impact on the group that you want to deter the most,” he said.

Dr. Hill supported this idea. “Knowledge seldom changes behavior in adults, but habit does. Habits are developed before the 3rd grade. And what better group than children to shape good habits?”


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