(HELENA) Lawmakers heard strong support and opposition Monday on a bill that would fund higher salaries for direct care workers by dramatically increasing Montana’s tobacco taxes.
The Senate Taxation Committee held a hearing on Senate Bill 354, sponsored by Sen. Mary Caferro, a Democrat from Helena. The bill would raise the tax on a pack of cigarettes by $1.50, to $3.20. Taxes on other tobacco products would be increased from 50 percent to 74 percent. For the first time, that tax would be extended to vapor products for use with e-cigarettes.
The money collected would be directed to caregivers who provide services under Medicaid. The minimum salary for those workers would increase to $10.80 an hour in October of this year, and rise to $13.80 by 2018.
Supporters said raising the price of cigarettes would be a strong incentive for people to stop smoking. They pointed to saying Montana spends more than $400 million a year on treating tobacco-related illnesses like cancer and heart disease.
“We think that this $1.50 increase is a bargain,” said Amanda Cahill, representing the American Heart Association.
Dr. Greg Holzman, the state medical officer at the Montana Department of Public Health and Human Services, said teenagers are particularly influenced by changes in the price of tobacco.
“You raise the price up, that doesn’t mean they might not experiment, but the chance that they’ll keep using over and over again and get addicted is a lot less likely,” he said.
The committee also heard testimony from operators and clients of direct-care facilities. They said low wages make it difficult to keep trained caregivers on staff, and the added revenue could help address that issue.
“I find it demoralizing and appalling that we can walk over to a fast-food place and make more starting out than staff who are legally responsible for taking care of your brothers, sisters, aunts, uncles, cousins, parents,” said David Condon, with Family Outreach in Helena.
But opponents argued the tax might not raise as much money as supporters expect, because smokers could circumvent it by buying cigarettes in other states or online. SB 354 would give Montana the fifth-highest cigarette tax of any state in the country.
”There are other places where folks can run and get cigarettes,” said Kenny Volk, a convenience store owner in Great Falls. “We’re already at a comparative disadvantage, and this bill would even heighten that even more.”
Volk also said the smaller increase in taxes on other tobacco products could simply lead to smokers buying bulk tobacco and rolling their own cigarettes.
Lawmakers also heard from e-cigarette sellers, who said SB 354 could force many of them to close their doors. They said their products are far safer than traditional cigarettes and can be effective in helping smokers quit, so they shouldn’t be taxed like other tobacco products.
“I’m not trying to promote cancer; I’m trying to help people improve their lifestyle, improve their health,” said Ron Marshall, who owns vape shops in Belgrade and Bozeman. “I stand here, and when I hear people say it doesn’t work – it works.”
The committee took no immediate action on the bill.