Steve Yeakel, Representing Montana Council for Maternal and Child Health, said that he supported committing $3.2 million a year for tobacco prevention as was proposed in SB 485 , and supported an 18 cent tobacco tax increase. However, because some county health departments might lose funding for mental health medications and some individuals might lose medicaid services, he could not support more than $3.2 million for tobacco prevention.In response, HB 756 sponsor, Rep. Kaufman, stated that she believed the Legislature could find other funding sources for human services programs, without using tobacco settlement dollars.The chairman of the House Appropriations Committee, Sen. Dave Lewis , gave the bill lukewarm support at the March 25, 2003 hearing. Lewis told tobacco prevention activists that he would try to grant their wish for $9.3 million for prevention programs, but warned that less money would therefore go to human service programs for the needy.Lewis further stated that “I’m tired of getting beat over the head,” and that “I’ll vote for this, but we got to come up with the money somewhere else.” Rep. Lewis did vote in favor of HB 756, which was passed by the House Appropriations Committee on March 26, 2003 by a voter of 13 to 6.235 It would next have to be voted on by the full House. As conveyed by Rep. Lewis’ comments,vertical grow system the House Committee’s support of HB 756 resulted largely from the health advocates’ pressure on the Legislature. According to the Billings Gazette, “[t]obacco prevention lobbysist lined the Capitol’s halls and packed hearing rooms to support keeping the voter-approved funding formula intact.”In the same article, Rep.
Lewis said that the health advocates that “[t]hey won fair and square.”On March 28, 2003, the full House approved HB 756 by a vote of 59 to 38. Local newspapers, however, reported that many lawmakers were still critical of the bill’s passage, arguing that the money should be available for other programs, because the human services budget was underfunded. HB 756 sponsor Rep. Kaufman responded in news reports that she was confident that the Legislature would find other sources of money to adequately fund human services programs.Kaufman stated that “[i]n the coming weeks, we have many opportunities to find revenue… And we will.” There were only 3 individuals testifying against SB 485, and they only gave very mild opposition to the “temporary diversion” of MSA money that was proposed. Joe Mazurek, representing PMK, opposed the bill, but also stated that the groups recognized the state’s budget predicament and were willing to take less than the full amount that the voters approved. Mazurek ended his testimony by saying he hoped that the tobacco prevention would get fully funded by the 2005 biennium. Verner Bertelsen, representing Montana Senior Citizen’s Association, stated that he was reluctant to testify against SB 485, and also hoped that tobacco prevention would be fully funded in the long run. Finally, Sammy Butler, representing the Montana Nurses Association, after commending Sen. Cobb for his commitment to fund human services programs, stated that his organization felt an obligation to respect the will of the voters, and that they reluctantly opposed SB 485. The Senate Finance and Claims Committee unanimously approved SB 485, 19 to 0, on April 1, 2003. The bill then went before the full Senate, which passed the bill by vote of 43 to 6 on April 14, 2003. SB 485 would next be transferred to the House, where it would be referred to House Committee on Business and Labor.At the April 16 hearing on SB 485 before the House Committee on Business and Labor, proponent testimony was given by representatives from 4 human services groups, including Jim Ahrens of the Montana Hospital Association.
Testimony in opposition to SB 485 was again presented by Joe Mazurek of PMK and Sammy Butler of the Montana Nurses Association. The House Committee on Business and Labor approved SB 485 by 14 to 4 on April 16, 2003. The full House approved SB 485 in a 60 to 40 vote on April 23, 2003.246 According to the Associated Press, none of the House members commenting on the passage of the bill by the full house argued against the need for funding of human services programs. Instead, House members against SB 485 focused their criticisms on respecting the will of the voters expressed in I-146, and the lack of a long term solution to the state’s budget problems.With the acquiescence from the very health groups that campaigned to get I-146 approved by voters, SB 485 passed with no trouble, and almost $11.8 million was diverted away from tobacco prevention in the 2004-2005 biennium. So by the end of April 2003, voter approved I-146 was virtually voided for two years. Thus, tobacco use prevention programs was allocated $3.2 million annually for the 2004-2005 biennium, as opposed to the $9 million annually specified under I-146 . Furthermore, the amount actually allocated to the TUPP in 2005 was lowered to $2.5 million per year after reduction adjustments to the state’s MSA payment . The state also appointed 15 people as a Tobacco Prevention Advisory Board in July of 2003 as was mandated by I-146, which would advise the DPHHS on how to allocate MSA money and play a similar role as the disbanded Governor’s Advisory Council on Tobacco Use Prevention .The $220 million budget deficit projected for the 2004-2005 biennium not only provided a justification for diversion of MSA funds to other human services programs, but also affected the 2003 Legislature’s consideration of increased tobacco taxes.Several tobacco tax increases were proposed in the 2003 Legislature, though only one would actually pass, Senate Bill 407. Even SB 407, however, would have probably failed if state legislators were less desperate to find additional state revenue. In the opinion of the major health groups , “had the state’s budget crisis not existed, a tobacco tax increase would not likely have passed.
Most legislators were clearly motivated simply by the need for additional revenue generated by the tobacco tax increase.”In addition to the state’s projected budget deficit, a survey of 405 Montana voters sponsored by Protect Montana Kids.org conducted in June 2003 by Harstad Strategic Research showed that tobacco taxes were a popular source of health care funding. The survey showed that 66% of those surveyed favored increasing tobacco taxes by 50 cents per pack if the revenues were directed to Montana health care services.As a result of the lack of funding for government services in 2003 and the public popularity of tobacco taxes as a source of health care funding, a tobacco tax increase was a popular option of revenue,indoor grow shelves despite what health advocated called a “reluctance on the part of some members of the legislature to increase tobacco taxes at all…”Several tobacco taxes were proposed by both Republicans and Democrats, though all of them except for SB 407 failed . Throughout the failed attempts to increase the cigarette tax, tobacco control groups gave consistent support to the proposed bills, while tobacco industry lobbyists consistently argued against them.The tobacco tax in Montana had not been permanently increased since 1990, when it was raised from 16 cents to 18 cents per pack. Former Gov. Marc Racicot in 2000 had included a cigarette tax increase of 38 cents a pack in his final budget recommendation before leaving office, but Gov. Judy Martz, who signed a no-new taxes pledge during her campaign, rejected the proposal.Tobacco control advocates had been promoting the idea of increased tobacco taxes throughout 2002 and 2003 as a way to raise funds for state programs and reduce tobacco use. In an April 30, 2002 opinion letter to the Helena Independent Record, Kristin Page Nei of ACS, Cliff Christian of AHA, and Dick Paulsen of ALA, wrote that “[t]he debate about tobacco taxes has recently heated up,”and noted that Montana in 2002 had the 11th lowest cigarette tax in the nation. The letter also explained the health costs in Montana resulting from smoke-related illness, and the potential for an increased cigarette tax to raise revenue for healthcare programs and deter children from smoking.The major health groups and other tobacco control advocates would continue to make statements in news articles as the debate over cigarette taxes became a greater focus in local newspapers. Tobacco control advocates also showed the popularity of the tobacco tax among Montana voters to state legislators. A Harstead Strategic Research Poll conducted between November 20-25 and paid for by health groups in Protect MontanaKids.org showed that, of 602 registered voters, 69% supported raising the per pack cigarette tax from 18 cents to $1.50 for the purpose of funding health programs, 27% were opposed to the increased tax, and 3% were undecided .
The poll was released on December 11, 2002, less than a month before the 2003 Legislature was to convene.Health groups and tobacco control advocates showed support for the failed cigarette tax proposals introduced throughout the 2003 Legislature . At a January 27, 2003 House Taxation Committee hearing where HB 204, HB 355 and HB 314 were presented, supporting testimony for cigarette taxes was given by 34 people, many of them representing health groups. Many of those same individuals and health groups also testified in favor of the SB 309 at the February 6, 2003 hearing before the Senate Taxation Committee,in support of SB 351 at the February 14, 2003 Senate Taxation Committee hearing,and in support of HB 763 at the March 31, 2003 House Taxation Committee Hearing.When the idea of increasing cigarette taxes began to be reported in local newspapers as an option that legislators were willing to consider, the tobacco industry began to criticize the idea. John Singleton, a spokesman for R.J. Reynolds, told the Billings Gazette that “[i]t’s a relatively small slice of the population to be paying for health care, budget deficit reduction, whatever they’re going to use the money for.”Singleton also stated that “[e]xcise taxes are already pretty high, and these various states are collecting quite a lot of revenue from the tobacco companies as it is.”The argument that the tobacco industry and smokers were paying an unfair share of taxes would be continued throughout the legislative session. Tobacco industry lobbyists opposed the failed cigarette tax proposals throughout the 2003 Legislative session. R.J. Reynolds lobbyist Jerome Anderson, in giving opposing testimony to HB 204, HB 355 and HB 314 at the January 27, 2003 House Taxation Committee hearing, stated that HB 204 would increase the state cigarette tax by 833%, and that HB 355 and HB 314 would amount to the highest tax increases he had seen in 56 years of Legislative sessions.265 Anderson added that smokers already pay their fair share and, though he agreed that Montanan needed help with health insurance and prescription drugs, he thought “those responsibilities are the responsibilities of everyone in Montana and not just a selective few.”265 Reflecting standard tobacco industry rhetoric, Anderson also suggested that large cigarette tax increases would lead to smuggling cigarettes from states with cheaper taxes or buying over the internet without proper security against sales to minors.265 Jerome Anderson and other tobacco industry representatives repeated these arguments when testifying against SB 309 at the February 6, 2003 Senate Taxation Committee hearing,258 against SB 351 at the February 14, 2003 Senate Taxation Committee hearing,259 and against HB 763 at the March 31, 2003 Taxation Committee Hearing.260. Along with Jerome Anderson, Aimee Grmoljez, an attorney with the firm Browing, Kaleczyc, Berry & Hoven , testified as a representative of Phillip Morris against the cigarette tax proposals, as did Mark Baker, representing U.S. Smokeless Tobacco and Mark Staples, representing Montana Wholesale Distributors.Governor Martz, as late as March 2003, was standing firm to her pledge not to raise new taxes, and stated specifically that her promise to veto tax increases included any cigarette taxes.Even in the face of a reported $232 million budget deficit, and with no solution to funding human services programs, Gov. Martz told reporters that she could not support the idea of paying the state’s bills by raising “sin” taxes.Although Gov. Martz did indicate a willingness to compromise her tax veto promise in support of proposed HB 750, which proposed violating the state’s coal tax trust fund and would therefore not gain enough votes because Democrats were unwilling to violate the trust.However, because the budget deficit in March 2003 was beginning to look unsolvable, Republican legislators became less opposed to raising tobacco taxes.