[Vision2020] Where would $1 billion in pot money go if California marijuana is legalized?

[Ron Force]

Just to keep things in perspective, $1 billion is 0.6% of the California
state budget. "Sin" taxes and lotteries rarely amount to much in the
overall scheme of things.

Ron Force
Moscow Idaho USA

On Mon, Sep 19, 2016 at 7:11 PM, Tom Hansen <thansen at moscow.com> wrote:

> Courtesy of the *Cannabist* (Denver, Colorado) at:
>
> http://www.thecannabist.co/2016/09/16/california-
> marijuana-tax-where-would-money-go/63307/
>
> --------------------------------
> Where would $1 billion in pot money go if California marijuana is
> legalized?Here’s a quick glance at how Proposition 64 is set up for
> spending California marijuana tax if legalized – from local benefits to
> other revenue predictions
>
> If you probe why the polls show a majority of California voters support
> <http://www.thecannabist.co/2016/09/13/california-marijuana-legalization-poll/63119/> a
> statewide effort to legalize recreational marijuana, increased tax revenue
> inevitably comes up.
>
> UC Irvine student Giovanni Chavez, like many backers of legalized pot,
> says he’s primarily concerned about personal liberty and studies showing
> disproportionate prosecution of minorities for drug offenses.
>
> But after watching state and local governments struggle through recurring
> budget crises, the aspiring political consultant said state-regulated
> marijuana sales would provide a new and needed stream of tax dollars.
>
> “We could use the extra revenue,” said Chavez, 21. “And the fact that we
> would be able to interfere with the black market is huge.”
>
> Supporters of legal recreational marijuana use point to Colorado, which
> legalized cannabis for adults in 2012. There, taxes and fees on weed are
> helping to build schools, repair roads and stabilize city budgets.
>
> But critics of Proposition 64, California’s legalization initiative on the
> November ballot, point out tax revenue from legal weed would be dispersed
> much differently here.
>
> Letitia Pepper, a Riverside attorney who uses medical marijuana to treat
> multiple sclerosis but is a vocal opponent of the measure, noted none of it
> would be dedicated to the general operations of local governments or
> schools.
>
> Proponents acknowledge California’s measure includes key differences in
> how pot funds could be used. But they add that local governments and
> students still can benefit from the measure.
>
> An estimated $1 billion in new tax revenue would be directed toward
> specific new or expanded programs such as drug use prevention and
> treatment, helping at-risk youth, law enforcement, environmental clean-up
> and research.
>
> Jason Kinney, spokesman for the Yes on Prop. 64 campaign, said the
> restrictions on public use of the new tax monies was intentional. If public
> agencies were allowed to balance their general spending budgets with
> marijuana taxes, he said, it could create an incentive for them to
> encourage a bigger marijuana industry.
>
> “The state of California shouldn’t be forced to rely on increased
> marijuana usage to address future K-12 education, infrastructure and other
> ongoing budget obligations,” he said.
>
> Instead, Diane Goldstein of North Tustin – a retired police officer who’s
> campaigning for Prop. 64 – argued that tax revenue from the measure would
> be wisely used to offset some financial and social harms of the failed war
> on drugs via increased investment in education, research and treatment.
>
> *REVENUE PREDICTIONS*
>
> Right now, hundreds of pot businesses operating in California – some with
> local permits and many without – are paying state sales tax of close to 8
> percent.
>
> In 2015, the state took in $58 million in sales tax revenue from some 974
> registered dispensaries, including nearly 400 in Los Angeles County and 70
> to 80 each in Orange, Riverside and San Bernardino counties, according to
> Board of Equalization data.
>
> That revenue is on track to nearly double this year.
>
> Under Prop. 64, all marijuana sales would be taxed an additional 15
> percent starting Jan. 1, 2018, on top of levies on regulated growers of
> $9.25 per ounce for dry flowers or $2.75 per ounce for leaves. Medical
> cannabis patients would be exempt from the state sales tax.
>
> The independent Legislative Analyst’s Office predicts Prop. 64 state tax
> revenues would total from the high hundreds of millions of dollars to more
> than $1 billion each year.
>
> That’s less than 1 percent of the state’s annual budget, or about what
> California brings in annually now from taxes on tobacco products.
>
> Keith Humphreys, a Stanford University professor who served on a state
> commission that studied approaches for legalizing marijuana, summed up the
> financial impact of Prop. 64 this way: “It’s not going to make us if we do,
> and it’s not going to break us if we don’t.”
>
> Tax revenue from legalized weed would first be used to cover “all
> reasonable costs” incurred by the state to administer and enforce the
> recreational cannabis regulations, according to the ballot measure.
>
> The Department of Consumer Affairs, which would oversee the new marijuana
> marketplace if Prop. 64 passes, doesn’t have an estimate yet of those
> administrative costs, according to spokeswoman Veronica Harms.
>
> The much smaller states of Oregon and Washington spend about $6 million
> and $8 million a year, respectively, on their medical and recreational
> programs.
>
> Colorado, which has the oldest and most robust recreational marijuana
> market in the nation, is budgeted to spend $16.3 million regulating legal
> marijuana this fiscal year, according to Robert Goulding, spokesman for the
> Colorado Department of Revenue.
>
> The program “pays it own way,” Goulding noted, with industry taxes,
> licenses and fees covering administrative costs while helping fund such
> things as school construction, youth education programs and poison control
> centers.
>
> Still, Prop. 64 opponents, including Orange County Sheriff Sandra
> Hutchens, say they’re concerned that tax revenue from legal marijuana sales
> won’t cover harder-to-quantify effects on public safety and health issues.
>
> *WHAT ABOUT LOCAL BENEFITS?*
>
> One statewide Colorado levy on pot provides cities with money to use as
> they choose. That allowed Denver to add $29 million to its general fund
> budget in 2015, the Denver Post reports.
>
> While Prop. 64 doesn’t provide new, dedicated revenue directly to cities
> and counties, proponents say there are still ways local governments can
> benefit from the measure.
>
> California cities that permit recreational marijuana businesses could
> increase income from sales taxes.
>
> There also would be opportunities for governments, schools, public safety
> agencies and nonprofits in cities that welcome the cannabis industry to
> compete for hundreds of millions a year in grants that will fund substance
> abuse programs, offset enforcement costs and more.
>
> Opponents of legalized pot argue all law enforcement agencies should be
> eligible for such grants, because the ballot measure would permit
> cultivation and personal consumption of marijuana at residences across the
> state.
>
> “They’re still going to have to deal with the problems of home grows and
> use, but there’s no money available to them,” said Andrew Acosta, spokesman
> for the No on 64 campaign.
>
> Kinney called such criticisms “disingenuous.” He pointed to a Legislative
> Analyst’s Office estimate that the state will save tens of millions of
> dollars each year in criminal justice costs if marijuana is legal.
>
> The measure also says cities and counties can ask voters to approve extra
> local taxes on cannabis.
>
> At least 18 California cities have already approved such levies on medical
> marijuana shops and farms. Among those is Santa Ana, which expects to
> collect $1.5 million in pot dispensary fees and taxes this year.
>
> Another 37 local measures appearing on ballots in the state in November
> call for new taxes on marijuana sales or cultivation. Officials predict
> those levies could generate up to $22 million a year in revenue for cities
> and counties.
>
> *POT TAX BREAKDOWN*
>
> After covering administrative costs, here are some uses for the remaining
> tax revenue if voters approve Prop. 64:
>
> • $10 million annually for 11 years for public universities in California
> to evaluate the impact of legalization and recommend policy changes, if
> needed. Research will cover topics such as public health, public safety and
> prices.
>
> • $3 million annually for five years to the CHP to develop protocols for
> determining when drivers are impaired by marijuana, with no good test
> available now.
>
> • $10 million, increasing to $50 million annually by 2022, for grants to
> local health departments and nonprofits that support addiction treatment,
> job placement, mental health treatment and other services for communities
> such as Compton and Oakland that have been hard-hit by previous drug
> policies.
>
> • $2 million annually to the UC San Diego Center for Medical Cannabis
> Research to study marijuana as medicine.
>
> The remaining revenue will be divvied up to include:
>
> • 60 percent to prevent young people from abusing substances by offering
> grants to schools and county health programs, funding treatment programs,
> helping at-risk youth and more. Estimated at $450 million or more a year.
>
> • 20 percent to help state environmental agencies restore waterways
> affected by cannabis cultivation and protect public lands from being used
> for marijuana activities. Projected to be upwards of $150 million annually.
>
> • 20 percent to the CHP to train officers for detecting DUIs and to offer
> grants to local law enforcement, fire protection or public health programs
> in regions where cultivation and sales are allowed. Expected to be some
> $150 million or more each year.
>
> Starting in 2028, legislators could funnel revenue to other programs. But
> they could never reduce the dollar amount going to youth programs,
> environmental agencies or law enforcement.
> --------------------------------
>
> Seeya 'round town, Moscow, because . . .
>
> "Moscow Cares" (the most fun you can have with your pants on)
> http://www.MoscowCares.com <http://www.moscowcares.com/>
>
> Tom Hansen
> Moscow, Idaho
>
>
> =======================================================
>  List services made available by First Step Internet,
>  serving the communities of the Palouse since 1994.
>                http://www.fsr.net
>           mailto:Vision2020 at moscow.com
> =======================================================
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/vision2020/attachments/20160919/b8c8cce9/attachment-0001.html>