An initiative seeking to increase tobacco taxes in Montana in order to fund Medicaid has been defeated by voters.
I-185 sought to raise the tax on a pack of cigarettes by $2 to $3.70, while also increasing the tax rate on tobacco products such as premium cigars by 33 percent to 83 percent of the wholesale price, as well as implementing that tax rate on e-cigarettes and vaping products.
In the case of a cigar with a MSRP of $9.50, under the state’s current tax rate of 50 percent of the whole sale price, it costs $14.25 at the register before any additional sales taxes are added. Had I-185 passed, that cost would have gone up to $17.39, by halfwheel estimates.
Additionally, taxes on moist snuff would have increased to the greater of 83% of wholesale or $3.70 per 1.2 ounces.
The bill would have eliminated the sunset date for expanded Medicaid services for certain low-income adults, which is currently scheduled to end on June 30, 2019. It would have also dedicated a percentage of these increased tax revenues for certain health-related programs, including some of the costs for Montana’s current Medicaid program. Additionally, it would have helped fund veterans’ services, smoking prevention and cessation programs and long-term care services for seniors and people with disabilities.
As of Thursday afternoon, the initiative had been defeated with 53 percent of voters opposing it.