I-185’s critics doubt its constitutionality; backers point to 2004 initiative

(Community News Service) While debate swirls over over the cost of an initiative to expand Medicaid by raising taxes on Montana tobacco products, questions over the measure’s constitutionality are drawing attention too.

Initiative 185 has the support of the American Heart Association, the Montana Hospital Association and Gov. Steve Bullock, who hope raising the tax on tobacco would help fund an expansion of Medicaid. Opponents include major national tobacco producers and the Montana Republican Party.

I-185 asks voters to increase the taxes on a pack of cigarettes by $2. Additionally, the measure would amend the definition of tobacco products to include e-cigarettes and vaping products. It would raise the tax on all of these products by 33 percent. Supporters expect the initiative, if approved, would raise an additional $74 million a year by 2023.

Some critics predict a lawsuit if the initiative passes. They cite the Montana Constitution’s Article III, Section 4, which says “the people may enact laws by initiative on all matters except appropriations of money.”

They say I-185 would effectively create a permanent appropriation for Medicaid expansion and, therefore, violate the constitution.

But that’s not a sure thing, says professor Anthony Johnstone, a former state solicitor who teaches at the University of Montana’s Alexander Blewett III School of Law. “We have not had cases on this for a long time,” he said. “There is some uncertainty here.”

Johnstone worked in the Montana Attorney General’s Office when a similar argument was made about Initiative 149 during the 2004 election. That measure, which voters approved, increased the tax on cigarettes by 140 percent, providing subsidies for small business health insurance plans, veterans’ nursing homes and need-based assistance for prescription drug insurance.

I-149 was challenged and upheld in Judge Dorothy McCarter’s District Court in Helena.
Afterward, McCarter said that the initiative was constitutional because it dealt only with the issue of where the money from tobacco taxes are spent, and did not effectively authorize the spending.

Johnstone said the issues and the arguments from 2004 are similar to ones being raised now, and the answer should remain the same: An appropriation authorizes the spending of government funds, whereas both initiatives would deposit money into special interest accounts and rely on the Legislature to approve their expenditure.

But disagreement over the 2004 initiative still lingers. State Sen. Scott Sales, a Bozeman Republican, said I-149 “probably should have been considered unconstitutional.” He said that petitions bringing initiatives like 149 and 185 are often done so with “limited knowledge of the subject matter and the state budget.”

Another aspect of the initiative that opponents take issue with is the idea that I-185 locks into place Montana’s existing Medicaid expansion program and strips away the Legislature's options for addressing overall cost effectiveness, and possible discontinuation.

But it will only pose an obstacle for the Legislature if I-185 passes. Johnstone said lawmakers will always be free to legislate over and around citizen initiatives.

“If the Legislature wants to do away with Medicaid, they have to vote on that and be accountable to their constituents,” Johnstone said.

Meanwhile, the campaign over I-185 continues to be one of the most expensive on November’s Montana ballot, with spending from backers and foes totaling more than $17 million by late September. Anti-I-185 groups had contributed nearly 72 percent of the total.

This story was written for the Community News Service, a service of University of Montana School of Journalism. Contact reporter Marti Liechty at marti.liechty@umconnect.umt.edu or editor Dennis Swibold at dennis.swibold@umontana.edu.