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Action on Smoking and Health
A National Legal-Action Antismoking Organization Entirely Supported by Tax-Deductible Contributions
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Montana Judge Strikes Down Tobacco Industry's Attempt to Remove Tobacco Tax from Nov. Voting Ballot [09/01-1]
Excerpts from: Tobacco firms lose ballot issue
By ALLISON FARRELL Billings Gazette [09/01/04]
The legal challenge that tobacco companies helped launch against a proposed
tobacco tax increase was shot down by a District Court judge here Tuesday,
allowing Montanans to vote on a $1 per pack cigarette tax increase in November.
Initiative 149, known as the tobacco tax ballot initiative, seeks to increase statewide tobacco taxes by 140 percent. Cigarette taxes would jump $1 a pack, from 70 cents to $1.70. The tax on snuff would increase from 35 cents to 85 cents an ounce and taxes on other tobacco products would increase from 25 percent to 50 percent of wholesale price.
The overall price of tobacco would jump about 25 percent in Montana.
Anti-smoking groups, who backed I-149, were cheered by District Judge Dorothy McCarter's expedited ruling. She heard the case late last week.
The proposed tax increase, if passed by a simply majority in November's general election, will raise $38.4 million for new health insurance and Medicaid initiatives, $6 million for the state's general budget and an additional $400,000 for state buildings.
Tobacco tax revenue will continue to flow into veterans nursing homes at a rate of $2 million a year.
Opponents of the initiative argued that the wording of the new initiative could threaten veterans' homes funding. But McCarter said the initiative is clear that the state will still be mandated to annually send $2 million of tobacco tax revenue to veterans' homes.
However, McCarter did change the wording of the ballot initiative so voters know that the new health programs proposed by the initiative are contingent upon legislative approval. The money would provide health insurance and prescription drug aid for the state's neediest and would help small businesses afford health insurance plans.
Lead defense attorney and state Solicitor Brian Morris said Monday the Supreme Court likely wouldn't hear any appeal before the election, since the court would be hard pressed to bump the tobacco initiative ahead of other cases.
The other counts brought by the plaintiffs were dismissed by McCarter. She said the initiative is not unconstitutional, because it doesn't give the people direct authority to spend the new tax revenue. She said the Legislature must ultimately authorize the spending of the funds.
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