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HELENA - The legal challenge that tobacco companies helped launch against a proposed tobacco tax increase was shot down by a district court judge Tuesday, allowing Montanans to vote on a $1-per-pack cigarette tax increase in November, reported the Billings Gazette.
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.
"I think the tobacco industry realized they were going to lose at the ballot box, so they turned to the jury box," said Dr. Richard Sargent, treasurer of the tobacco tax ballot committee. "It's a fairly desperate ploy by them to do that. I take that as a very positive sign."
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.
Lawyers for the plaintiffs, a group including war veterans, U.S. Smokeless Tobacco Co., R.J. Reynolds Tobacco Co. and the state association of convenience store owners, said they're pleased McCarter recognized that the ballot statement was misleading. They have until Sept. 7 to appeal her decision.