Tax: MT: Tobacco tax update

Montana

Tax Update

Tobacco tax falling short of expectations

May 4, 2005
By ALLISON FARRELL
Gazette State Bureau

HELENA – Tobacco tax revenue is falling short of the state’s original projections and some programs, such as the Children’s Health Insurance Program and new prescription drug aid programs, might be caught in the financial crosshairs.

It appears that the new $1-per-pack incease in the tax on cigarettes, approved by voters in November, is reducing the number of cigarettes sold in state. That means the state is receiving less tobacco tax revenue than it anticipated.

State Budget Director David Ewer said Tuesday that tobacco tax revenue projections have been reduced by $3 million for the first six months of 2005. The state originally projected to raise $16.2 million in tobacco tax funds for new health programs by June 30 but is now hoping to bring in $13.3 million.

“It’s still early to say we’ll meet what we’ve targeted for our revenue estimates,” Ewer said Tuesday. “But it is true that the data we have so far shows less revenue than we’ve projected.”

The state originally projected to raise $71 million for five health-care programs over the next two years.

The projects include:

$10.5 million for Medicaid.

$11.9 million for increases in rates paid to physicians who treat Medicaid patients.

$7 million for the Children’s Health Insurance Program or CHIP.

$15.75 million for prescription drug help for the elderly, disabled and poor.

$17.55 million to help small businesses afford health insurance.

The rest of the money is slated to be put into reserve.

But if the money doesn’t roll in, then the programs have to be scaled back, Ewer said. No decisions will be made until late summer or fall, he said.

Chuck Hunter, administrator of the Health Resources Division in the state Department of Health and Human Services, said the extra money from the tobacco tax is slated to expand the programs rolls by 3,000 children. Currently, CHIP serves 10,900 Montana kids.

But CHIP will have to limit that expansion if the money falls short, Hunter said.

“We are hearing from the budget office that collections are not what they expected,” Hunter said. “We are trying to be circumspect about how we do our planning for enrollment.”

The Medicaid programs are the first priority when it comes to funding, Ewer said.

“Those have got to be funded first,” Ewer said.

Once those programs get their funding, the other programs’ needs will be considered. While the CHIP program would give free health insurance to more children, the pharmacy program would help the elderly, the disabled and the poor afford their prescription medications.

“This is going to provide an awful lot of coverage,” said John Chappuis, deputy director of the state health department.

The state pharmacy program would pay the $35 monthly premium for poor Montana seniors who want to enroll in the new federal Medicare drug benefit. The program would also subsidize pharmacy consultations and would also let impoverished seniors buy drugs at a government rate.

The final program to be funded with the tobacco tax revenue will give tax credits to small businesses that offer health insurance to their employees. But all these programs depend on Montanans’ continued purchase of tobacco.

“If that money isn’t there, it would be my responsibility as budget director as to what kind of pro-rating we’d have in these programs,” Ewer said.

Ewer said he is expecting the tobacco tax revenues to rebound in the next few months.

http://www.billingsgazette.com/
?


MT: Let the feeding frenzy begin. Groups seek portions of tobacco tax.

Montana – Initiative 149 – The initiative would raise the cigarette tax.
MT: Tobacco tax hike approved, will jump $1 per pack.


Tobacco tax hike approved

By ALLISON FARRELL
IR State Bureau
11/03/04

HELENA Montana’s cigarette tax will jump $1 per pack come Jan. 1, since voters passed Initiative 149 by a large margin Tuesday night.

The 140 percent tax hike passed by a 66 to 34 percent margin, with 137 of 881 precincts reporting. The new tax will raise $38 million for new health insurance and Medicaid initiatives, an additional $400,000 for state buildings and $6 million more for the state general fund.

Supporters say funding for the state veterans’ nursing homes will remain at $2 million, even though opponents say the initiative threatens funding for state veterans’ nursing homes. Funding for the homes has long come from the state’s tobacco tax revenue.

“The message here is that Montana is no longer Marlboro country,” said Richard Sargent, a Helena physician and proponent of the tobacco tax.

But Roger Hagan of Helena, who represents a private association of enlisted National Guard members, said opponents may seek remedy from the 2005 Legislature. Hagan said opponents want lawmakers to ensure that state funding for veterans’ nursing homes remains whole. Opponents include U.S. war veterans, the American Legion and several tobacco companies.
?
“Veterans should not have to fight for their nursing home benefits,” Hagan said.

On Jan. 1, cigarette taxes will jump $1 per pack, from .70 cents to $1.70 per pack. 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 will jump 25 percent.

The $38 million raised by the initiative for health programs would provide more money to the state Children’s Health Insurance Program, a low income prescription drug assistance program, a senior prescription drug assistance program and would help small businesses purchase health insurance for employees.


Cigarette tax to rise $1 per pack
By ALLISON FARRELL
Gazette State Bureau

HELENA – Montana’s cigarette tax will jump $1 a pack come Jan. 1 because voters passed Initiative 149 by a large margin Tuesday.

The 140 percent tax increase passed by a 65 to 35 percent margin, with 375 of 881 precincts reporting. The new tax will raise $38 million for new health insurance and Medicaid initiatives, an additional $400,000 for state buildings and $6 million more for the state general fund.

“The message here is that Montana is no longer Marlboro country,” said Richard Sargent, a Helena physician and proponent of the tobacco tax.

Supporters say funding for the state veterans’ nursing homes will remain at $2 million, even though opponents say the initiative threatens funding for the homes.

Roger Hagan of Helena, who represents a private association of enlisted National Guard members, said opponents may seek remedy from the 2005 Legislature. Hagan said opponents want lawmakers to ensure that state funding for veterans’ nursing homes remains whole. Opponents include U.S. war veterans, the American Legion and several tobacco companies.

“Veterans should not have to fight for their nursing home benefits,” Hagan said.

On Jan. 1, cigarette taxes will jump from 70 cents to $1.70 a pack. The tax on snuff will increase from 35 cents to 85 cents an ounce, and taxes on other tobacco products will increase from 25 percent to 50 percent of the wholesale price.

The overall price of tobacco will jump 25 percent.

The $38 million raised by the initiative for health programs would also provide more money to the state Children’s Health Insurance Program, a low-income prescription drug assistance program and a senior prescription drug assistance program. It will also help small businesses purchase health insurance for employees.
http://www.billingsgazette.com

Be the first to comment

Leave a Reply

Your email address will not be published.


*