Proposed pot tax is reasonable, necessary
A year ago, when Colorado voters approved Amendment 64, the ballot measure that legalized the use of recreational marijuana in this state, one of the selling points used by proponents of the amendment was that taxes on legalized marijuana could help pay for school construction in Colorado.
Proposition AA on this November’s ballot is the sensible mechanism for establishing those taxes. It deserves voters’ support.
The proposition, referred to the ballot by the state Legislature, would create a 15 percent excise tax on the wholesale marijuana sold by marijuana cultivation facilities, and a 10 percent sales tax on retail sales of marijuana and marijuana products.
The taxes would raise an estimated $27.5 million for school construction next year, plus $33.5 million in sales taxes for state government, a portion of which would be used to pay for regulatory oversight of legalized marijuana. An estimated $6 million would go to local governments that allow retail marijuana outlets.
To their credit, most of the proponents of last year’s Amendment 64, including the owners of many medical marijuana dispensaries, are sticking with the arguments they made last year and are supporting Proposition AA.
Supporters of Proposition AA include the Marijuana Policy Project and the Medical Marijuana Industry Group, as well as state lawmakers on both sides of the political aisle and groups such as the Colorado Municipal League, Club 20 and the Colorado Association of Chiefs of Police.
However, a small minority of marijuana users and advocates has been arguing publicly — through public demonstrations on the Front Range — that the taxes that would be imposed under Proposition AA are too high and will drive marijuana users back to the black market to obtain their pot.
Among other things, they point to the fact that the proposed marijuana taxes will be higher than the state excise tax on alcohol (although less than the state tax on tobacco). That’s true, but doesn’t factor in the federal taxes on alcohol, which are based on the proportion of alcohol in the product.
When federal taxes are added for, say, a bottle of whiskey, the total taxes paid on that bottle would be higher, as a percentage of the sales price, than what the taxes would be for marijuana under Proposition AA. Yet whiskey drinkers aren’t turning to moonshiners to obtain their favored form of alcohol without paying taxes.
Moreover, the amount of taxes proposed in Colorado for recreational marijuana is roughly half what the state of Washington is assessing for pot. Washington became the only other state in the union to legalize marijuana last year.
Beginning Jan. 1, retail outlets for the sale of nonmedical marijuana will begin opening in various communities in the state, as allowed under Amendment 64 — communities that have not banned retail marijuana outlets, as most of Mesa County has done.
The state’s Marijuana Enforcement Division will have its hands full regulating the cultivation, processing and sale of both medical and recreational marijuana, including the licensing of retail outlets. It must also enforce laws for testing, tracking and labeling of marijuana and develop measures to prevent legal marijuana from ending up in the hands of juveniles or on the black market, both in Colorado and in other states.
Accomplishing this requires money, and the revenue from the sales tax that is part of Proposition AA is critical in ensuring funding is available. Money should not be taken from other state needs to pay for marijuana regulation and enforcement.
Furthermore, the money for school construction, which will go into the Building Excellent Schools Today fund created by the state Legislature in 2008, will fulfill the promise made by Amendment 64 backers last year.
For all of these reasons, the measure on this year’s ballot makes sense. We urge a “Yes” vote on Proposition AA.