HomeMy WebLinkAbout01-22-2014 Items submitted at the meeting � PC 0122.14 P95.2
VII.B.Recreational Marijuana
� Submitted by: Dave Jones
,, cmroF �'"'''* * In#erofFce Il�emorandum
* WASHINGTON C�TY Q�p,USiJRN
�P�' C!_FRKS OFFICE
To: David Jones, Planner JAN �'�i 7_Q 14
Elizabeth Chamberlain, Plannin Mana r
From: Daniel B. Heid, City Attorney
Date: January 9, 2014
Re: Tax Revenues for Cities from Initiative 502—NOTHING FOR CITIES
The citizens of the State of Washington recently app�oved Initiative 502 (I-502) seeking to
decriminalize recreational use of marijuana by persons 21 years of age and older.
One of the sales pitches accompanying that Initiative campaign was that it would
generate state and local revenue for certain purposes, taking money away frorn those
who engaged in the illegal trade of marijuana.
( Following the initiative's approval — voter approval, the State of Washington; and the
Liquor Control Board to which marijuana related responsibilities have been directed,have
identified issues and are promulgating regulations for legalized recreational marijuana.
However, the question has surfaced at the Planning Department and Planning
Commission levels about what this means for local jurisdictions, including the City of
Aubum; what tax revenues would inure to cites and the City of Aubum.
The blunt answer appears to be that no tax revenues from marijuana would be coming to
cities based upon the language of 1-502. I-502 does provide for significant marijuana
excise taxes — equal to 25 percent of the selling price of wholesale marijuana, usable
marijuana and marijuana infused products. Unfortunately, however, all of this money is
directed to or through the state for various purposes.
The "Funded" purposes include such things as money for the Departrnent of Social and
Health Services for state health use services and for cost-benefit evaluation reports.
Additionally, money goes to the University of Washington for creation and maintenance of
web-based education materials, and to tlie State Liquor Control Board for administration
and prevention programs, and to the Departrnent of Health for marijuana education
programs and basic health plan administration, as well as for communily health senrices
(primary health, dental services, migrant health services; matemiiy health services, etc.).
,
Memo to: David Jones, Planner
Elizabeth Chamberiain, Planning Services Manager
From: Daniel B. Heid, City Attomey
Subject Tax Revenues for Cities from Initiative 502
Date: January 9,2014
Page 2
There are even revenues that would go to Superintendant of Public instruction to fund
grants for"building bridges programs" under RCW 27A.175.
The remainder of the money goes to the state general fund. None of the money
goes toJocal jurisdictions.
The only hope for future revenues mighY(I emphasize the word migh fl be that when the
state conducts its cost-benefd analysis, of the factors �wiil consider, among the dozen or
more factors identified in the lnitiative, will be consideration of taxes generated for state
and local budgets, criminal justice impacfs, and state and/ocal administrative costs.
Ironically, again, this cost-benefit analysis will considerstate and local costs, and nothing
is promised. But none of the revenue to be generated by I-502, according to 4he language
of the lnitiative, is directed to local jurisdictions. This is ironic because most of the law
enforcemerrt responsibilities thaf will result from increased marijuana usage will fall on the
shoulders of cities and counties and their law enforcement agencies. This includeg any
marijuana related crimes, such as theft and properly crimes, but would also include
increased incidents of driving under the influence of this (now legal) intoxicant. Forthat
matter, many people a�e worried that the "oificially sanctioned and licensed" sale of
marijuana will push prices up higher, especially if taxed at 25%. And these higher
marijuana prices may encourage some to engage in [or continue engaging in] the black-
market sale of marijuana. For instance, we hear reports of the price of"legal"marijuana in
Colorado reaching as high as $400 or more per ounce. With a price in that range, it may
be fhat some in the illegal trade will still be able to find a ready market. If that is the case,
this will only increase the law enforcemenfissues facing local law enforcemerit agencies.
�URN * MORE THAN YOU [MAGINED