Hazy government budget projections from pot tax could go up in smoke

A friend of mine had quite a suggestion the other day. With the flop sweat running in streams off the Avalon theater project, he suggested the project might be able to pay for itself by establishing a rooftop marijuana garden.

The material could be harvested and processed into edible products like THC-infused butter, to be used in age-legal “Fall into your seat” brand popcorn.

The city of Grand Junction, which has pretty much purchased the project, could use the gardening staff we see poking around the downtown flower pots and the city official who proclaimed the project to be on budget as a prelude to the request for $1.4 million more in funds, could process the material. After all, if you think that’s an on-budget project, how much harm can being around a lot of drugs really do?

Unfortunately, if the state’s experience with this commodity is any indication, this probably would not be the masterstroke we would hope.

This week, it was reported that revenue the state would collect from the sale of recreational marijuana may not hit the target that Gov. John Hickenlooper’s office had estimated. Breitbart.com pointed out that the governor’s budget office felt recreational and medicinal marijuana sales would accumulate in the neighborhood of $134 million in tax and fee revenues but initial collections don’t put it anywhere near that projection.

To be fair, we don’t really know what will happen since Colorado is the only place, including the Netherlands, which allows sales, growing and distribution of marijuana.

In January, the state only brought in $2 million from the recreational pot market and combining that with medical marijuana taxes and fees, the total was still only $3.5 million. During the same time period last year the state made about $2.7 million in liquor excise taxes, for which the “newness” has worn off a bit since Prohibition.

As usual, the government has plans to spend marijuana-related revenue before it’s collected. The governor has reportedly proposed a $134 million budget for the revenue, to include spending for such mixed messages as anti-drug advertising to kids and trying to discourage individuals from driving while stoned. This is apparently needed as marijuana-related contacts in the school system have skyrocketed and become quite a topic of educational conversation.

Recently, Channel 4 in Denver reported that three students in Westminster were arrested and others are facing suspension after marijuana edibles were located at a middle school. Reportedly, several students had eaten marijuana candies and had later appeared to be high in class, with a total of about 15 students involved in the incident and some claiming they didn’t even know they were given marijuana.

This is an especially interesting development since it is in line with warnings by anti-legalization groups, but don’t worry. The first $40 million in these projected drug revenues is apparently earmarked for schools. All schools need to do is shake the kids awake, slide them a bag of Cheetos to take the edge off and see if they can learn something.

I know the argument is that kids have been drinking in school forever but let’s face it, carrying a bag of brownies in your backpack is a lot easier than sloshing around a fifth of Old Crow between your locker and geometry class. Plus, you’re less likely to throw up and most importantly you don’t smell like a moonshiner to everyone standing near you.

I don’t think anyone can make a straightfaced argument that some kids aren’t going to pick up an easily transported recreational drug their parents can legally purchase and can be made to look like a Tootsie Roll. This is also part of the reason that statewide law enforcement wants $3-$5 million out of this hazy budget projection to combat the ills they see coming from the legalization.

However, the state budget projections might be at least partially saved by drug cartels, which could use legal marijuana shops and more importantly legal banking for the proceeds, to launder money from drug operations outside the state, through Colorado.

I’m having a hard time seeing how all of this is a better way to get tax revenue than producing energy products through fracking, but what I can see is it takes government to make selling drugs unprofitable.

Rick Wagner writes about politics in his blog, The War on Wrong.

COMMENTS

Commenting is not available in this channel entry.

Rick, it seems to me that your argument is more against the majority of Colorado voters that approved recreational marijuana. Through user taxes, the state is simply trying to implement that decision and provide protection and education for potential underage users. The state has no previous experience with this now legal type of commerce. If your beef is with the legalization of the drug, then start a citizens’ initiative to have it repealed.








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