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HELENA, Mont. -- Montana attorneys argued to a district judge Thursday that contrary to a recent lawsuit, an initiative to increase the state's tobacco tax is constitutional and does not jeopardize current funding for state veterans homes, according to Associated Press.
Veterans' groups, tobacco wholesalers, convenience stores and some tobacco companies asked the court in a lawsuit last month to remove Initiative 149 from the November ballot. The groups argue it violates the state constitution by appropriating money, which is a responsibility reserved for the legislature, and contains multiple subjects.
Initiative 149 calls for increasing the 70-cent tax on a pack of cigarettes to $1.70. The tax on chewing tobacco would jump from 35 cents to 85 cents per ounce, and the tax rate on other tobacco products would double from 25 percent to 50 percent of the wholesale price.
The measure, which would take effect Jan. 1 if passed, would raise an additional $44.7 million in its first full year, according to estimates from the governor's budget office. Most of the new money -- about $38.4 million a year -- would be spent on programs providing health insurance to poor children; prescription drugs to poor children, the elderly, chronically ill and disabled; and help to small businesses that offer employee health insurance. About $6 million would be added to the state treasury and $414,000 would be available for state building needs.
In arguments filed Thursday, Attorney General Mike McGrath and Solicitor Brian Morris rejected claims that the initiative may cut funding for Montana's veterans' homes, saying the homes would continue to receive $2 million in tobacco tax revenues each year. They also said it did not call for appropriating any money, but would only distribute tax revenues for specific uses -- something they said is legal under state law.
Plaintiffs in the suit include the American Legion of Montana, the Montana Department of the Veterans of Foreign Wars, the Montana Wholesalers and Distributors Association, the Montana Petroleum Marketers Association, R.J. Reynolds Tobacco Co. and U.S. Smokeless Tobacco Co. While not a plaintiff, Philip Morris USA is helping fund the lawsuit.