MTPR

Record Spending Against Montana's I-185 Tobacco Tax

Oct 28, 2018

Spending in the campaigns for and against I-185 has made it the most expensive ballot measure race in Montana history.

The ballot initiative to raise tobacco taxes and continue Medicaid expansion has drawn more than $17 million in spending from tobacco companies. Most has come from cigarette maker Altria, and it’s more than the company has ever spent on any proposed ballot measure nationwide. That’s according to records from the National Center for Money in Politics dating back to 2004.

Backers of I-185 have spent close to $8 million, with most of the money coming from the Montana Hospital Association.

Amanda Cahill, a spokesperson for Healthy Montana, the yes on 185 coalition, says its members knew big tobacco would fight back.

"We poked the bear, that's for sure," Cahill says.  "And it's not because we were all around the table saying, 'hey, we want to have a huge fight and go through trauma the next several months.' It's because it's the right thing to do."

I-185 would put a new $2 per pack tax on cigarettes, and tax other tobacco products, including electronic cigarettes, which are currently not taxed in Montana.

"What we want to do is, number one, stop Big Tobacco's hold on Montana," Cahill says. "And then also of course we care about, you know, nearly 100,000 people in Montana that have Medicaid expansion keeping their health care."

I-185 would allocate a portion of the estimated $74 million a year in new tobacco tax revenue to fund continuation of Medicaid expansion in Montana, which the state Legislature passed in 2015. Expansion is set to expire next year unless state lawmakers vote to continue it. Some lawmakers say the state can’t afford it. Cahill says I-185 will allocate plenty of money to continue Medicaid expansion here.

"It's about $26 million," Cahill says. "When you put that towards Medicaid expansion plus the cost savings from Medicaid expansion, that completely funds Montana's share of Medicaid expansion."

Cahill says the ads that tobacco companies fighting 185 have been running saying the tax won’t fully fund Medicaid expansion don’t take into account the more than $4 million a year the state will collect in premiums that Medicaid recipients have to pay, nor millions more expansion saves the state by, among other things, paying for lots of health care for state prisoners.

We asked Altria, the cigarette company spending the most against 185 for an interview, they didn’t respond. Their paid spokesman in Montana, Chuck Denowh also declined an interview request. Denowh referred us to Nancy Ballance, an opponent not on the tobacco companies’ payroll.

"In general I am not in favor of what we like to refer to as sin taxes," Ballance says. "Those are taxes that someone determines it should be taxed so that you change people's behavior."

Chair of the Legislative Finance Committee Rep. Nancy Ballance.
Credit Mike Albans

Ballance, a Republican, represents part of the Bitterroot Valley in the state House. She also isn’t in favor of ballot initiatives that try go around the core functions of the Legislature: Deciding how much revenue the state needs, where it should come from, and how it should be spent.

"An initiative like this for a very large policy with a very large price tag," Ballance says. "The Legislature is responsible for studying that -- and they do over a long period of time -- to understand what all the consequences are, intended and otherwise. And if that's bypassed and citizens are allowed to do that -- I don't know very many citizens who have the time to really understand in-depth the policy."

One part of the policy that hasn’t come up much in the debate of I-185 is that if it passes, far more Montanans will have access to medical help to quit smoking. And that could have a lot to do with big tobacco companies spending more than $17 million fighting a new tobacco tax in a state with only about 150,000 smokers.

"People that are covered are more likely to not smoke than people who are uninsured," says Ben Miller with the non-profit Wellbeing Trust. Miller has studied tobacco tax policies for years. He points to research showing that lower income people are more likely to smoke, and if they’re uninsured, they’re less likely to quit.

So I-185 would tax tobacco companies, and then use the money to fund programs that help people quit using their products. That’s a double whammy when per-pack taxes are already proven to drive smoking rates down, Miller says.

"Every time you raise cigarette taxes, price per pack results typically lead to a decrease in people smoking," Miller says. "So that works against their business model, which is you need to smoke so we can make money."

I-185 opponent Nancy Ballance agrees that tobacco companies must see ballot initiatives like this one as threats to their core business. And she agrees that tobacco use is one of Montana’s top public health concerns. But she doesn’t think government should be in the business of policing peoples’ behavior, nor that higher taxes will speed the more than 50 percent decline in cigarette sales Montana has seen since 1998.

"Anybody who wants to continue smoking or is significantly addicted, the cost is not going to prohibit them from smoking," Ballance says. "There are other things that are much more effective such as the Clean Indoor act Air Clean Indoor Air Act. I think that had a huge impact."

The U.S. Centers for Disease Control and Prevention says tobacco use is the leading cause of preventable disease and death in the country. The state health department says more than 1,600 people in Montana die every year from tobacco-related illnesses.