The “1987 State of the States” report also gives insight into the tobacco industry’s ally groups up to that time, again showing a strong partnership with the Montana Association of Tobacco and Candy Distributors: “Montana’s wholesaler association has been quite helpful to us in the past… The member company representatives are also willing to involve their account, retailers, etc., in fighting tobacco restriction measures.”The report also noted that Montana’s vendor’s, “although few in number, have been quite helpful to us in the past and would appear to be supportive of our efforts to limit excise tax increases.”The report observes that other business allies, however, were less involved in opposing tobacco control legislation : “The Montana Retail Association has been moderately helpful to us in the past, as has the Montana Restaurant Association. Both organizations, though, are somewhat ambivalent to tobacco issues, preferring to become directly involved only in those [areas] that appear to affect them directly.”The report went on to state that the Tobacco Institute had “not been particularly successful in recruiting labor [organizations] on any of our tobacco issues…” but that recruiting such groups would be a priority in the future.The lack of activity by health groups and health advocates which was exemplified during the 1983 cigarette tax debate, and which was observed by the Tobacco Institute in 1987, continued in 1989 when Rep. Bob Pavlovich introduced HB 202 on January 16, 1989,growers solution catalog which would increase the cigarette tax by 2 cents, from 16 cents, for a total of 18 cents per pack.
The tax estimated to raise $2.4 million in the biennium.At the a hearing before the House Committee on Taxation on March 16, 1989, Rep. Pavlovich stated that the bill was being proposed to finance the planning and building of nursing homes for veterans, and to provide additional beds for existing veterans’ facilities.Proponent testimony centered around the dire need to provide health care for World War II veterans, and the insufficient number of facilities and resources to care for the veteran community. Among those who testified in favor of the bill were representative of the state Veteran’s Affairs Department, the American Legion, the United Veterans of Montana, and the American Defenders of Bataan and Corregidor.No public health arguments were made in support of the bill. Similar to the 1983 cigarette tax hearings, the tobacco industry was well represented. The list of those testifying against HB 202 included the following individuals: Jerome Anderson, Tom Maddox , Rex Manuel , Tom Stump , Gene Philips, , and Roger Tippy .Opposing testimony argued that an increased tax would cause declining sales, and thus reduced revenue, and that the cigarette tax was “selective” and unfair.The arguments of the tobacco industry did not prevail over the need to fund veterans’ facilities, and HB 202 was approved by the House on March 30, 1989 by vote of 65 to 32. When HB 202 was transmitted to the Senate, the same groups testifying at the House hearing also testified at the Senate Taxation Committee hearing on April 7, 1989, and the same arguments were repeated.On April 17, 1989, the Senate approved HB 202 in a 26 to 24 vote, and the bill was signed by the Governor on May 16, 1989.In January 1990, Initiative 115 was filed with the Montana Secretary of State. The proposed initiative would ask voters to increase the tax on cigarettes from 18 cents to 43 cents a pack, and increase the tax on other tobacco product to 25 percent of the wholesale price.
The increased tax would raise an estimated $16.8 million annually, and would be used to create a Tobacco Education and Prevention Health Care Fund within the State Department of Health, with 50% of the revenue going to programs to reduce smoking among people under 21 years of age, 30% going to prenatel and perinatel care programs, 6% towards tobacco-related disease research, and 14% for administration, fire prevention, environmental conservation, and unspecified “damage restoration.”Supporters of the initiative estimated that if the initiative had been successful, the tax would have decreased overall smoking prevalence by 6%, and smoking initiation of teenagers by 15% in the first five years of enactment.The proposed initiative was modeled after California’s successful 1988 cigarette tax initiative, Proposition and was brought by a group of physicians and health-care professionals that formed a ballot issue committee called “Health Professional, Consumers, and Concerned Citizens for the Tobacco Tax,” .Dr. Robert M. Shepard, a Montana family physician and one of the leaders of the organization, said the idea for the ballot initiative came from a group in Montana who saw what had happened in California, where the cigarette tax was increased by 25 cents and then spent on tobacco education and use prevention.The health group coalition believed that the same thing could be done in Montana. The initiative proponents were required to submit at least 18, 351 valid signatures from 34 legislative districts by June 29, 1990.Fund raising for the petition drive began in January 1990, but proponents found little financial support from state and local medical and educational organizations. For instance, the Montana Medical Association was not initially supportive and the Montana Education Association refused to help, nor did any religious organizations provide assistance.However, the petition drive did receive some financial support and several volunteers from the Montana Academy of Family Physicians and Montana Public Health Association, as well as from state and local health organizations and individual supporters. Having little financial resources, the proponents of I-115 had to conduct a volunteer petition drive.Supporters began circulating the petition in February 1990, but the petition drive was unorganized at first.A “Ballot Issue Update” written by Bob McAdam, Tobacco Institute Vice President of Special Projects, and Stan Bowman, a Tobacco Institute Director, observed that I- 115 proponents initially showed “little organized fund raising or signature gathering activities.”In the first two months of the petition drive, only 3,000 signatures were obtained.However, in the last five weeks before the June 29, 1990 deadline, volunteers were able to obtain 19,000 names in a “whirlwind” effort.A June 18, 1990 incomplete tobacco industry ballot issue update observed that although I-115 proponents had previously “missed several key opportunities to gather signatures,” they eventually took advantage of large public events: “During the Governor’s Cup race, they had signature gatherers walking among the crowd of 10,000,” and that “on primary day, they were present at several polling places outside of Helena.”54 On June 29, 1990, I-115 proponents filed their signatures with the various county’s across the state, and announced that they had submitted 22,800 signatures.On July 17, 1990, the Secretary of State certified the initiative for the November ballot,racking commercial but the incredible push for signatures at the end of the drive had left many volunteers burned out and low on energy, which was believed by some observers of the campaign to be a contributing factor in the initiative’s ultimate failure.In the campaign phase of I-115, the Montana Academy of Family Physicians and the Montana Public Health Association continued to provide financial support, and were joined by the Montana Medical PAC , the American Cancer Society, the American Heart Association, and the and American Lung Association, whom together contributed most of the funds for the campaign . Several smaller professional organizations and individuals made contributions as well, bringing the total contributions to the group to $39,474.07.Because of their limited financial resources, the proponents ran only a small number of newspaper, radio, and television advertisement, did no direct mailings, and conducted only one survey pole .The money raised by the supporters of I-115 was dwarfed by the financial resources of the initiative’s opponents, who were organized as the ballot issue committee “Tobacco Consumers, Distributors & Producers Opposed to Unfair Tobacco Sales Taxes.” The group received financial contributions totaling $1,475,673. Contributions came from several tobacco companies , as well as from the Smokeless Tobacco Council and the Tobacco Institute in Washington D.C. Tobacco related organizations that made only non-monetary, in-kind contributions were the Tobacco and Candy Distributors Association and U.S. Tobacco .According to a series of four Tobacco Institute documents titled “Montana Tax Initiative Allocation of Assessment” starting in December 15, 1989 and ending November 20, 1989, contributions from five of the tobacco companies to the I-115 opposition campaign were allocated based on each companies production of cigarettes in the prior year.A March 23, 1992 Tobacco Institute memorandum from Robert S. McAdam shows that the Tobacco Institute would also use polls in Massachusetts, Colorado,Oregon, and Arkansas for several purposes, such as to “establish initial themes that can be used in all of our public comments and to begin to assess the scope and cost of the entire campaign…”; to “determine the themes that can be used both with the earned media responses and to the electorate at large”; and “to determine public sentiment” on the tobacco tax issues.The Montana campaign outline went on to say that the “general negative attitude,” which was determined from the survey, “can be successfully utilized to defeat the tobacco tax increase proposal.”Opponents took advantage of the significant anti-tax sentiment in Montana by using television, radio, and newspaper advertisements that emphasized the pivotal issues of state taxes and bureaucracy.Brochures were sent to businesses with the message, “Initiative 115 – the 140% per pack cigarette tax increase – can you afford it?” and mailings were sent to voters describing the cigarette tax as “a trap set by ‘special interests’ to subsidize those people who live in cities.”The pro-tax campaign was further hurt by the fact that Initiative 115 would give Montana the highest cigarette tax in the nation, and that there had been significant property tax increases in rural areas right before the election.Opponents took advantage of the newly increased property tax with an ad stating, “although they could not do anything about outrageous property taxes, they could vote against the ‘selective tax increase.’” Proponents of I-115 learned from California’s Proposition 99 in 1988 that increased funding for programs to reduce smoking among children was popular among voters, and thus focused heavily on the decrease in youth smoking and the funding of health programs that would result from the increased cigarette tax.But this message was overshadowed by the anti-tax attitude that was prevalent in Montana in 1990, and may have even served to strengthen the oppositions anti-tax argument.The tobacco industry campaign outline also shows an attempt by the tobacco industry to bypass “Fair Doctrine” principles in campaign advertising . The outline states that “[c]are would be taken in buying certain television stations based on commercial limitations and Fairness Doctrine station policies,” noting that “[t]he large majority of radio stations pay little attention to ‘Fairness Doctrine’ access requests,” and that “[m]ore work has to be done in the area of selling TV stations’ management against running nationally originated anti-cigarette smoking Heart and Lung Association PSA spots.” According to Dr. Shepard, tobacco industry representative Jerome Anderson had successfully persuaded Governor Stan Stephens to “stop all of his public service announcements on tobacco, all of the health messages, anything he was going to say about tobacco… in the next nine months until the initiative process was over. Because they didn’t want it to look like maybe the Governor was supporting something.”Dr. Shepard further stated that the tobacco industry had “convinced several TV stations that by putting us on morning talk shows for 5 minutes, they could ‘balance’ the hundreds of thousands of dollars they spent on advertising.”An August 7, 1990 memorandum written by Bob McAdam included in a “Confidential Ballot Initiative Committee Briefing Book” for the Tobacco Institute shows that the tobacco industry had originally attempted to get even more cooperation from broadcasters in limiting the message of initiative proponents.The memorandum observed that “many broadcasters that have been contacted by our campaign in the state have indicated that they will provide ‘equal time’ to the proponents of the initiative at a rate of 4 or 5 to one,” as a result of a “letter from the FCC clearly stating that the repeal of the fairness doctrine does not necessarily apply to ballot issues” .