State marijuana tax dollars provide limited support locally
The three-county region of Eagle, Garfield and Pitkin encompasses 5,621 square miles, has a combined population of 133,000 residents, and is home to dozens of marijuana shops.
Those stores also combined for more than $66 million of Colorado’s record-breaking $2.2 billion in retail sales of marijuana in 2020, according to Colorado Department Revenue data.
Consumers of retail marijuana in Colorado are hit with a trio of taxes at the point of sale — there’s a 2.9% state sales tax, a 15% marijuana retail sales tax (not applicable to medical pot), and a 15% excise tax. Some municipalities — such as Snowmass Village, but not Aspen — have additional taxes on cannabis. Snowmass voters passed a 5% sales tax on marijuana in November 2018.
Retail marijuana sales in 2020
Eagle $22.8 million
Garfield $29.2 million
Pitkin $14.4 million
Total $66.4 million
Source: Colorado Department of Revenue; totals are rounded up
Populations by county
Source: U.S. Census Bureau (figures based through July 2019)
Taxing marijuana has been a primary arguing point for advocates of cannabis legalization, including those “fiscal conservatives who complain America is spending $40 billion a year on the War on Drugs rather than making a few billion taxing it,” journalist Ioan Grillo wrote in “El Narco: Inside Mexico’s Criminal Insurgency,“ published in November 2011.
When it comes to billions in tax revenue from pot sales, count Colorado — where in November 2012 voters passed Amendment 64 legalizing the sale of retail marijuana, pitched as a boon to school districts’ coffers — among the beneficiaries. Voters a year later in 2013 approved Proposition AA calling for a 15% excise tax and up to 15% retail tax, which started at 10%.
Ever since the clock struck 9 on the morning of Jan. 1, 2014, in Colorado, people have been buying marijuana legally, needing just an ID to show they’re 21. Through December they’d bought enough cannabis products — that doesn’t include paraphernalia and other accessories — to close in on the $10 billion mark in sales. More precisely, it was $9,978,794,073 in sales through December.
From February 2014 to January 2020, the state had collected $1.6 billion in marijuana taxes and fee revenue, according to the Department of Revenue.
2021 $35 million (January only)
2020 $387.5 million
2019 $302.5 million
2018 $266.5 million
2017 $247.4 million
2016 $193.6 million
2015 $130.4 million
2014 $67.6 million (Feb – Dec)
Source: Colorado Department of Revenue
Where the money goes
On its website, the Colorado Department of Education notes “though the amount of tax revenue that comes from marijuana sales is minimal — around 1 percent of the state’s total education budget — the money is directed to a variety of programs, including school construction, bullying prevention and behavioral health.”
The Aspen School District has seen some marijuana tax dollars — more than $80,000 annually for three years to pay for a district counselor from 2017-20. That money, $250,000, came from the School Health Professional Grants Program, which is supported through taxes from marijuana sales.
Yet the district, which is coming off a November win at the polls where voters approved spending $95 million on capital improvements, hasn’t reaped any of money from the Colorado Department of Education’s Building Excellent Schools Today (BEST) program since it started to receive one-third from marijuana excise tax dollars. The program also is supported by revenue from the Colorado Lottery and the state land trust. BEST budgeted nearly $90 million for fiscal year 2019-20 to go toward school construction, according to the CDE.
BEST, which was established in 2008, in 2012 approved a grant application from the Aspen Community School, awarding it $4.2 million toward the construction of the new charter school in Woody Creek.
At the time the grant was awarded, the BEST program was not supported by marijuana dollars.
Aspen School District CFO Linda Warhoe said other than funds used to pay a school counselor, the district has seen minimal marijuana tax revenue. The Aspen Education Association raises private funds for the district and provides the district with much greater financial aid without the strings attached to state funding, she said.
Even so, Warhoe said the district plans to be more aggressive when it comes to pursuing marijuana tax dollars.
“I think our governor has heard loud and clear from school districts that this isn’t benefiting everyone, and there’s money sitting there not being spent. And we’re sitting here with no pay raises,” Warhoe said of stagnant wages.
“We need to make sure our voices are heard,” she added.
From 2015-19, the city of Aspen’s take of state marijuana taxes was $525,000, including $168,011 in 2019, according Pete Strecker, city finance director.
“The state has requirements around its retained portion of the tax, but for our local government share – we apply these as discretionary resources for supporting departments under the General Fund,” Strecker said in an email to The Aspen Times.
Snowmass Village Town Manager Clint Kinney said he isn’t aware of any state marijuana tax dollars coming to the town. The town combines its local tax revenue from tobacco and marijuana sales, which totaled $134,917 in 2020. Similar to Pitkin County’s tobacco tax, which will increase 10 cents annually until it reached $4 per pack, the collections will be used to support local social and mental-health services.
Pitkin County and local law enforcement in 2018 also received a grant from the state Office of Behavioral Health, which came from state marijuana tax revenue, to create a diversion program intended to keep people struggling with mental health issues or with substance abuse out of jail.
The progarm, called Pitkin Area Co-Responder Team, is supported by a grant of “up to $362,500 per year from the Marijuana Tax Cash Fund, which was awarded to Pitkin County Public Health in 2018 by the Colorado State Office of Behavioral Health,” the county said at the time.
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