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HELENA – A tax that would increase the price of a package of cigarettes by $1.50 got approval from the Senate on Tuesday.

The tax would to help pay for raises for direct health care workers who take care of the elderly and disabled in their homes. It would also for the first time charge a tax on e-cigarettes and vaping products.

Senate Bill 354 is carried by Sen. Mary Caferro, D-Helena. It passed the Senate on a 27-22 vote and now moves over to the House.

Lawmakers who supported the tax said it would reduce the amount of people who smoke and lower health care costs caused by tobacco-related diseases. Those who voted against it said would harm the poorest Montanans, who tend to smoke more than people who earn more. 

The tax is estimated to bring in an additional $70 million a year over the current tax.

Increased wages for direct care workers will cost about $34 million a year and the hourly wage would increase by $5.60 for those working in nursing homes and $6.26 for those in other settings. Direct care wages start around $9 an hour. The rest of the cigarette tax revenues to smoking cessation and prevention efforts, as well as a Medicaid account, maintaining state-owned buildings and the state's general funds.

A pack of Marlboro Reds would jump from about $6.63 to $8.13 under the tax, which would go from $1.70 to $3.20. Montanans buy 43.4 million packs of cigarettes a year.

An ounce of snuff sells for about $3.20, and between the increased tax and expected price increases, that amount is projected to double if the bill goes into effect. About 12.3 million ounces of snuff are sold in the state each year.

Montana last raised its tobacco tax 12 years ago. The number of children who smoke has dropped by half since then.

Caferro said the money will go to people who "do the important work in our community taking care of our elderly and people who have disabilities" and that less people starting smoking in their youth would lower health care costs down the road.

The state spends $441 million a year to care for people who have tobacco-related diseases, Caferro said. That works out to $770 a household. An estimated 1,600 Montanans die each year from tobacco-related diseases.

“This tax hits where it does the most good with kids and hopefully it brings down the cost of health care and saves money and saves lives. This saves money by preventing people from starting in the first place and also targets the money to give raises to direct care workers who do very important work."

Those who voted against the tax called it regressive and targeted at poor people.

"It is on other blue-collar people, on my people," said Sen. Eric Moore, R-Miles City. "You try running a baler for 16 hours and try to stay awake without snuff."

Senate Majority Leader Fred Thomas, of Stevensville, said the bill would take the cost of smoking for an individual from $1,233 to $1,781 a year. "Talk about regressive."

Senate President Scott Sales, R-Bozeman, offered strong opposition to the bill. He said people will find ways to buy cigarettes from other states and the revenue won't be enough to support the wage increases.

"You always get less of what you tax more. This isn't a panacea. This is bad tax policy and we're going to come to regret it on so many fronts."

Sales said if the Legislature really cared about health it should not raise taxes on snuff and smokeless tobacco, which he said is healthier than smoking cigarettes because it isn't nicotine that's bad, but the inhaling of smoke.

"It's much healthier, it really is. I'm not saying it is a healthy thing to chew, but compared to smoking it is much healthier. It's less harmful to you than smoking cigarettes."

Sales told the Senate that his son, who smokes, called him in a panic the day before the vote to say that the price of cigarettes will jump to $8-$9 a pack "The first thing out of my mouth was 'You need to quit smoking,'" Sales said, adding he has family who has died of lung cancer.

But he also said that smokers who die earlier can save the government money, not cost more.

"The dirty little secret is that if we were going to be honest smokers would probably save us money in the long run. The dirty little truth is smokers really have a reduced life expectancy. They die in their 60s and 70s. They don't end up in a Medicaid-funded old-folks home until they're 105 at taxpayers' expense."

Sales said he wasn't advocating smoking but called for an "honest discussion about the whole subject matter." He also said the extra money isn't needed because the recent revenue forecasts show the state can expect an extra $105 million coming in over what was expected at the start of the session.

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