Voters asked to let state keep tax money from marijuana
October 25, 2015
Among the decisions Colorado voters will make in voting that ends Nov. 3 is how to allocate $66 million collected from retail marijuana taxes.
If voters approve Proposition BB — the Colorado Marijuana TABOR Refund Measure — the state retains the money. If it is rejected, the revenue will be refunded to the marijuana industry and taxpayers.
The state estimates each taxpayer would receive about $8.
Under Article X of the Colorado Constitution — generally referred to as the Taxpayer Bill of Rights — voters must ratify any new taxes.
In 2013, voters approved Proposition AA to establish excise and sales tax on retail marijuana. Proposition AA was required as a result of Amendment 64, which legalized the sale and consumption of retail cannabis to adults 21 and older.
The Taxpayer Bill of Rights requires the state to estimate both the amount of revenue it would collect from the marijuana tax and total revenue. Proposition AA authorized increasing state taxes by $70 million annually and estimated overall state revenue at $12.08 billion, with an estimated $67 million added to state revenue from retail marijuana excise and sales tax.
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Although actual revenue for retail marijuana in fiscal year 2014-15 was about $1 million below estimates, total state revenue came in higher than anticipated. Estimated at $12.08 billion, the actual state revenue was $12.35 billion, or $270 million above calculations.
Thus, in fiscal year 2014-15, if either estimate is exceeded, the state is required to refund the total $66 million retail marijuana tax collected.
So if voters approve Proposition BB, how will the retail marijuana tax money be spent?
The majority of funding, $40 million, would be transferred by the state to the public school Capital Construction Assistance Fund. A total of $12 million would be divided among the following projects:
• $2.5 million: marijuana education and prevention.
• $2 million: school bullying prevention.
• $2 million: school drop-out prevention.
• $2 million: youth mentoring
• $1 million: funding for poison-control centers.
• $1 million: local government marijuana impact grants.
• $500,000: substance-abuse screening, intervention and referral.
• $500,000: substance-abuse treatment.
• $300,000: FFA and 4-H programs.
• $200,000: roadside impaired-driving training for police.
The remaining $6 million would stay in the general fund.
If voters decide they prefer a refund and vote against Proposition BB, here is the breakdown of where the money will be distributed:
A total of $25 million would be divided among Colorado residents who filed a 2015 state income tax return. The state estimates this could be as low as $8 per taxpayer. Another $24 million would be refunded to retail marijuana cultivators, and $17 million would be refunded to retail marijuana purchasers through a temporary reduction on the retail marijuana sales rate.
Also, if voters do not approve Proposition BB, local governments will lose approximately $6 million from the state starting in 2016.
Mason Tvert, director of communications for the Marijuana Policy Project, who served as campaign co-director for Amendment 64, said the public's sentiments have been clear.
"Colorado voters want marijuana to be taxed, and they want these funds to be used to benefit programs in Colorado," he said. "They have voted twice to have funds go towards public school construction."
State Rep. Millie Hamner said in a recent letter to the editor that a constitutional hiccup with TABOR tax limits would force the state to return the money to marijuana merchants and consumers.
"Proposition BB, which is on the ballots arriving in our mailboxes this week, would allow the people of Colorado to invest marijuana tax revenue for schools and safety, which are the purposes the people intended when they legalized marijuana," she wrote.