HELENA – Supporters of Initiative 185, which raises state tobacco taxes and extends Medicaid expansion in Montana, rolled out a campaign ad Wednesday featuring a prominent backer: Gov. Steve Bullock.
In the ad, the Democratic governor says “big tobacco corporations are spending millions of out-of-state dollars misleading Montanans about efforts to protect our health care.”
He goes on to say that I-185 “fully funds” Medicaid expansion for 100,000 low-income Montanans and “saves Montana taxpayers money,” and asks Montanans to join him in voting for it.
The end-use of the money raised by I-185’s higher tobacco taxes has become a flash-point in the campaign, with opponents alleging the measure doesn’t pay for the state’s entire share of Medicaid-expansion costs and thus creates a “$34 million unfunded mandate.
I-185, if approved by voters in November, would increase tobacco taxes by $2 per pack of cigarettes and 67 percent for other tobacco products. It would raise about $70 million a year in revenue.
The measure also makes permanent Montana’s Medicaid expansion program, which is set to expire next June if it’s not renewed by voters or the 2019 Legislature.
The state’s share of Medicaid expansion outlays is estimated at about $60 million a year, starting next year. The federal government covers the remainder, more than $500 million a year.
I-185, however, earmarks only $26 million of its revenue for Medicaid expansion costs – hence, the assertion by opponents that it creates an “unfunded mandate.” The rest goes to other programs and the state treasury.
Supporters, however, say expanded Medicaid also saves the state about $30 million a year, mostly by covering certain low-income patients with a higher federal match. Therefore, they argue, I-185 does raise enough money to cover the state’s costs – the point made by Bullock in the ad.
I-185 supporters said the ad featuring Bullock will be running statewide on regular, cable and satellite TV and digital platforms.
Two tobacco giants – Altria Client Services and RAI Services Co. – have almost entirely funded the anti-I-185 campaign, putting nearly $9 million into the effort.
Supporters of I-185 had raised or spent about $2 million on their campaign through the end of August. The biggest single donor has been MHA, the state’s hospital lobby, at $1.3 million.