Special session may address glitch in new marijuana law
The error that the Colorado Legislature made during this year’s session on a sweeping new law that altered how the state deals with certain fees and taxes will impact a handful of special districts on the Western Slope.
The error centers on SB267, the measure that took the hospital provider fee out from under the revenue caps set by the Taxpayer’s Bill of Rights.
The new law, which went into effect July 1, made several other changes, including doing away with a state sales tax on retail marijuana, replacing it with a higher excise tax.
That sales tax change inadvertently included certain special districts that collect sales taxes, such as regional transportation districts and authorities. While not at the scale that such districts as Denver’s RTD will see, which could lose as much as $3 million, three regional transit authorities on the Western Slope also were impacted.
The new law eliminated a 2.9 percent state sales tax on recreational pot, but increased the excise tax on marijuana from 10 percent to 15 percent. The law didn’t impact medical marijuana sales.
The Roaring Fork Transportation Authority, which offers bus service from Rifle to Aspen, would lose thousands of dollars if the new law isn’t repaired, which the Legislature will try to do when it meets Oct. 2 for a special session called by Gov. John Hickenlooper last week.
Dan Blankenship, chief executive officer of RFTA, said he’s not sure exactly how much money the authority stands to lose if the law isn’t fixed, but it’s substantial. “In 2016, RFTA collected approximately $116,000 in sales tax revenue on the sale of recreational marijuana,” Blankenship said he told his governing board. “Through June 2017, RFTA’s sales tax collections on recreational marijuana were approximately $55,000, up approximately 22 percent from the same period in 2016.”
Scott Truex, executive director of the Gunnison Valley Transit Authority, said his agency estimates a loss of up to $65,000 a year if the new law isn’t changed.
The law was hailed as a bipartisan fix to how the state is allowed to deal with certain revenues such as the provider fee, which is used to fund health care programs for the poor. Removing it from under TABOR will free up millions of dollars for other programs, such as schools and transportation. The new law also called for issuing certificates of participation to fund up to $2 billion in transportation and capital construction costs.
It only adversely impacted those special districts that assess sales taxes, such as transit districts, arts districts, certain housing authorities and health services districts.
As a result, the only other districts on the Western Slope that are impacted include the Summit Combined Housing Authority in Summit County and the Montezuma Hospital District in Montezuma County.
Grand Valley Transit, which serves Mesa County, isn’t affected because it is not a special district, but the product of an intergovernmental agreement.