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Republicans Move to Kill Montana Tobacco Tax Increase

The tax hike, which passed the Senate last week on a 27-22 vote, would raise more than $30 million a year

By MATT VOLZ, Associated Press

HELENA — Republican lawmakers took steps Thursday to kill a proposed increase in Montana’s tobacco tax by voting for a procedural motion that will make it extremely difficult to bring the bill to the House floor for a vote.

The tax hike, which passed the Senate last week on a 27-22 vote, would raise more than $30 million a year that would go, in part, to increase the wages of the caregivers of elderly and disabled Medicaid patients.

It also would boost the bottom line of the proposed 2018-2019 state budget, which is now short of the $200 million reserve Republican leaders want to leave to protect against potential revenue shortfalls over the next two years.

However, that gap appears likely to close after the House Taxation Committee raised the state’s revenue estimate that is used to set the budget. The new estimate, adopted earlier Thursday, aligns with a forecast that predicts the state will collect an additional $100 million by 2019.

Democrats on the committee objected to adopting the higher estimate, saying it’s not clear that extra money will actually materialize.

Democratic Gov. Steve Bullock said the higher revenue estimate gives the Republican leaders a way to walk away from the legislative session without having to make hard decisions about tax increases to help boost revenue.

“Banking on a $100 million windfall is probably a roll of the dice that Montanans can’t afford because if we don’t have that unprecedented growth in the next three months, as that estimate suggests, we’d be forced by law to be making harmful cuts,” Bullock said.

Hours after passing the higher revenue estimate, the committee voted on party lines to effectively kill the tobacco tax bill. The committee voted 12-8 to submit what’s called an adverse committee report, meaning that 60 of the 100 representatives would have to vote Friday to bring the bill to the House floor.

A day earlier, supporters lined up to tell the House Taxation Committee that the bill would help reduce smoking, make cigarettes too expensive for children to buy and help caregivers who are desperately in need of a raise.

Sen. Mary Caferro, D-Helena, is the bill’s sponsor and she acknowledges the votes aren’t there.

“I think it’s dead,” she said. “It looks like this Legislature is going to turn its back on people who have disabilities and senior citizens, and ignore the problems of the people who care for them.”

Rep. Kerry White, R-Bozeman, made the motion to effectively kill the bill. He said he had grave concerns about the tax hike’s impact on poor people, and that the price disparity that would result between Montana and neighboring states could create a black market for cigarettes.

“We’re talking about a $30 profit on a carton,” White said. “I’ve got a big problem with that.”

Democrats on the committee objected that the bill should get a vote on the House floor instead of 12 Republicans on the committee unilaterally deciding to kill it.

“I hope the public in Montana is looking at what the majority party is doing to our democratic process,” said Rep. Mary Ann Dunwell, D-Helena. “You are making it a sham.”

Under the bill, the tax on a pack of cigarettes would rise from $1.70 to $3.20, and taxes would also be raised on snuff, other tobacco products and, for the first time, e-cigarettes.