In November, Colorado voters will be asked, by way of Proposition BB, whether state government should be allowed to keep and spend the revenue generated by taxing recreational marijuana. They should heartily endorse it. It would, after all, simply do what they said twice before.
It is ridiculous that this third vote is required, but without it, the state will lose all of the marijuana tax collected in fiscal year 2014-2015. Exactly why is complicated and, in practical terms, unimportant.
For most Colorado voters, tax revenue is fundamental to legalizing pot. Amendment 64, passed by voters in 2012, legalized recreational marijuana. Although it left the details to the Legislature, it clearly envisioned taxing marijuana. The words “legalize” and “tax” were regularly used in tandem throughout the campaign to pass Amendment 64. Supporters touted the tax revenue legalization was expected to bring as a key selling point.
The voters knew from the beginning that taxing pot was part of the deal. Amendment 64’s ballot title specifically includes “requiring the General Assembly to enact an excise tax to sales of marijuana.” It further specified that the first $40 million generated by that tax “be credited to the public school capital construction assistance fund.”
The Legislature then put Proposition AA before the voters in 2013 to enact the tax envisioned in Amendment 64. The voters approved it as well.
Proposition BB would allow the state to keep and spend revenue from taxes the voters have clearly approved – twice. In terms of what it would accomplish, it really is that simple.
And with that money, the state will do some real good. Of the more than $63 million of pot tax collected (exact figures are not yet available) $40 million will go to school construction, $12 million will go to a variety of programs aimed at treating and preventing substance abuse and programs that benefit kids (including 4-H and Future Farmers of America) and other efforts such as training peace officers. The remainder will be allocated when final numbers are available.
It is how we got here that is weird and complicated. It stems from an esoteric provision of the Colorado Constitution – part of the so-called Tax Payers Bill of Rights – that is both confusing and complex.
TABOR requires that when asked to approve a tax increase, two estimates must be presented in the Blue Book provided to voters. One is the estimated revenue from the proposed new tax. The other is the estimated total state revenue for the next fiscal year that is subject to the TABOR spending limit. If either of the actual figures for that fiscal year exceed the estimate, the new tax must be refunded in its entirety. This applies only to the first year of a new tax.
For fiscal year 2014-15, the first year of the pot tax, marijuana revenue was actually less than the Blue Book figure. But because Colorado’s economy has been doing well, the total state revenue figure is expected to be $270 million over the estimate. And with that, if Proposition BB does not pass, the state will be required to refund all of the marijuana taxes collected.
It gets worse. More than $22 million would go to retail marijuana cultivators. Another $16 million would go to pot purchasers through a tax cut. Only $25 million would go to Colorado taxpayers. That works out to roughly $8 for an individual with an adjusted gross income of $30,000; up to $32 for a couple making more than $196,800.
Better to give the money to schools and programs for kids. Support Proposition BB.
