Figuring out what to do with an extra $28 million in tax income is a good problem for a state to have.
DENVER—Colorado's legal marijuana market is far exceeding tax expectations, according to a budget proposal released Wednesday by Gov. John Hickenlooper that gives the first official estimate of how much the state expects to make from pot taxes...
The governor predicted sales and excise taxes next fiscal year would produce some $98 million, well above a $70 million annual estimate given to voters when they approved the pot taxes last year. The governor also includes taxes from medical pot, which are subject only to the statewide 2.9 percent sales tax.
It's like Christmas come early—I hope other states are feeling jealous.
Governor John Hickenlooper said his priorities for spending the marijuana revenue include youth drug-use prevention, substance-abuse treatment, and public health, plus some presumably one-time costs like a "Drive High, Get a DUI" media campaign. Hopefully, once a few years have passed and people see that the sky hasn't fallen, that kind of marijuana-mitigation spending can be rerouted to more basic state needs.
Legislators in Olympia just announced their projections of $190 million in pot-related tax revenue over a four-year period, or an average of $47.5 million per year.
The forecast by the Economic and Revenue Forecast Council showed that $51 million in revenue is expected for the 2015-2017 biennium from marijuana production and sales. An additional $138.5 million is expected for the next two-year budget that ends mid-2019. A little under half of that revenue is expected from excise tax and license fees related to the marijuana market, and the rest is expected to come from retail sales tax and business taxes...
Steve Lerch, the council’s executive director, said that because of concerns over local moratoriums and bans on pot sales and general uncertainty about how the system will work, the council has made assumptions that sales won’t start until June of next year.
Uncertainty, of course, is the name of the game until we actually start selling—two years ago, when there was much more uncertainty about how this would all work, state officials were projecting over $500 million in tax revenue within the first year of legalization and regulation.
You can see a breakdown of how Washington State will spend its pot tax revenue at the ACLU's website (the link is a pdf). Our state's plan includes allocations for health care, drug prevention, and drug education, but also routing money to the general fund to use for whatever's needed.
If our current estimates are wrong, please let them be wrong Colorado-style.