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THE '99 SESSION House votes to use tobacco cash for state tax relief Proposal expected to radically change before Racicot gets it By ERICA CURLESS Gazette State Bureau HELENA - Tax relief took precedence over health care Wednesday when the House voted to sink half of Montana's tobacco settlement into an account the 2001 Legislature would divvy up among taxpayers. Democrats argued lawmakers cannot dictate how future Legislatures can spend state cash. But House Speaker John Mercer of Kalispell bluntly told the body that Wednesday's actions are irrelevant because a joint House-Senate committee will make the final decision on how to distribute the expected $832 million settlement Montana is to receive over the next 27 years. In a 50-48 vote, the House voted to give an estimated $63 million in tax relief to Montanans during the budget period that ends June 30, 2003. After that, Montanans would receive about $15 million annually in tax relief. The amendment, by Majority Leader Larry Grinde of Lewistown, would have failed on a tie vote if Rep. Kim Gillan, D-Billings hadn't accidentally voted yes. House rules prevented Gillan from correcting her vote because it would have changed the outcome of the bill. Gillian refused to comment on her vote. Three other Democrats also voted in favor of the tax relief amendment. The radically amended House Bill 131, by Rep. Betty Lou Kasten, R-Brockway, passed the House 65-35. HB131 would put $10 million into the state's pocketbook, or general fund, when Montana receives its first payment, which is estimated at $47 million. That money is expected by June 2000. Another $8 million of that payment would go to fund the Children's Health Insurance Program, or CHIP, which would provide health coverage for 10,100 uninsured children. If Montana doesn't receive its first payment on time, lawmakers could borrow money from the general fund to run the program. Lawmakers would divide the remaining $9 million among health-related programs. Ten percent would go toward CHIP, 20.6 percent to a permanent trust, 41 percent tobacco-prevention and health care grants and 3.4 percent for the Montana Comprehensive Health Association. The MCHA provides coverage to people denied by private insurance carriers. After 2000, 50 percent of the tobacco settlement payments would go into the tax relief account. Lawmakers would use the same percentages to divide the other 50 percent among those programs. Originally, HB131 put 40 percent of the cash into the general fund. Democrats successfully struck that requirement from the measure. They argued socking the money into the general fund meant lawmakers could spend it on non-tobacco related programs, which would defeat the settlement's purpose. Some Democrats said they specifically didn't want the money to go toward tax relief. Grinde's amendment solidified that worry. Besides putting tobacco cash toward tax relief, Grinde also limited to $6.9 million each year the amount allowed for grants to specific organizations. Health care advocates said that cap defeats the purpose of the state's lawsuit against the tobacco industry, which was to stop Montanans' use of tobacco products. Lobbyists said they plan to offer amendments during the Senate debate. House members spent proposing amendments that ranged from putting money toward special education to increasing Medicaid reimbursement rates for physicians and specialists. Kasten, who added her own amendments in the House Appropriations Committee, pleaded with lawmakers to resist the dozen amendment attempts. "I really think if everyone wants a piece of this pie in the future, you should leave the structure as it is," Kasten said. Instead of offering amendments, Kasten suggested the programs vying for tobacco cash should apply for the grants, which are open to any eligible organization including schools, Indian tribes and health care groups. It's likely the Senate Finance and Claims Committee will debate the bill next. Most lawmakers and lobbyists agreed HB131 will radically change before it goes to Gov. Marc Racicot. "It doesn't matter what you do with this bill today," Mercer told the Republican caucus earlier in the day. "It's an evolving thing and the Senate will have the last say."
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