Pubdate: Wed, 08 May 2013
Source: Washington Times (DC)
Copyright: 2013 The Washington Times, LLC.
Contact:  http://www.washingtontimes.com/
Details: http://www.mapinc.org/media/492
Author: Valerie Richardson

COLORADO'S TAX ON POT STILL A WORRY FOR BACKERS

Meeting Revenue Goals Will Be in Voters' Hands

DENVER - Recreational marijuana was sold to Colorado voters as a 
revenue source for schools, but some lawmakers now worry that they 
may wind up with all of the pot and none of the money.

State Senate President John Morse vowed to revive a repeal effort on 
recreational marijuana next year if proposed sales and excise taxes 
on the drug fail to win voter approval in November. The Senate killed 
a proposal late Monday that would have given voters the repeal option 
on this year's ballot.

Colorado's Amendment 64, the 2012 legalization measure, calls on the 
legislature to place a 15 percent excise tax on the ballot, but it 
doesn't say what will happen if the voters reject it. Under the 
state's Taxpayer Bill of Rights, only voters may approve a tax increase.

Mr. Morse, a Democrat, raised the possibility Monday that the 
marijuana industry may actually campaign against the proposed pot 
taxes "with their millions from out of state."

"Here is the inherent problem, the marijuana industry has no 
incentive to support a tax increase it promised voters [benefiting 
schools]," Mr. Morse said in a statement. "The industry intentionally 
worded the initiative to force a second ballot question to the voters."

Coloradans may now wish they had done what Washington state voters 
did in November. Both states approved recreational marijuana use for 
adults 21 and older, but included in Washington's ballot measure were 
three 25 percent excise taxes on producers, processors and retailers.

Both states are entering uncharted territory on recreational 
marijuana supply and demand, with little to guide them but the 
medical marijuana markets now operating in 18 states. On Monday, the 
California Supreme Court ruled that cities and counties may ban 
medical marijuana dispensaries within their borders.

Amendment 64 dedicates the first $40 million raised by the excise tax 
for school construction, but legislators say a special sales tax is 
needed to cover the costs of regulation and enforcement. A bill 
expected to win final approval Tuesday asks voters to approve a 15 
percent excise tax and 10 percent sales tax on marijuana that may be 
increased by legislators to 15 percent.

"The voters wanted legalized marijuana and a tax that funded schools. 
But it is a strong reality that the tax will not pass," Mr. Morse 
said. "I have yet to meet an industry that supports increasing taxes 
on themselves."

Supporters of recreational marijuana insist that voters will approve 
the taxation proposal. A poll conducted three weeks ago by Public 
Policy Polling found that 77 percent of Coloradans surveyed would 
support a 10 percent sales tax on pot.

Mason Tvert, who led the Amendment 64 campaign, emphasized that the 
state's legalization drive was run by advocates, not the marijuana 
industry, and that they continue to support the concept of excise and 
sales taxes.

"The Amendment 64 campaign has no interest in working against these 
taxes," Mr. Tvert said. "We've been saying the whole time, we want 
marijuana taxed."

At the same time, Mr. Tvert, who now works for the Marijuana Policy 
Project, said the campaign has no plans to ring doorbells in favor of 
the proposed tax structure but said state legislators should.

"We expect everyone who's saying these taxes are necessary to support 
and campaign in favor of the ballot measure in the fall," he said. 
"If they don't, then we have to question what their motives are."

Oddly enough, the tax proposal could wind up uniting the marijuana 
industry and its chief critics. If the tax fails, the pressure on the 
state legislature from anti-drug groups such as Smart Colorado to 
repeal Amendment 64 will be intense.

"If the tax measure is unsuccessful in November, the Colorado 
taxpayers will not be left holding the bag - the legislature will 
take this issue up again," Mr. Morse said.

Denver pollster Floyd Ciruli predicted that the measure will pass, 
given the electorate's tendency to support "sin taxes" such as those 
on tobacco.

"The people dealing directly with the price problem are a relatively 
small group, and they're less likely to vote in a non-presidential 
year," Mr. Ciruli said. "This measure is going to be decided by nonusers."

Republicans have argued in favor of keeping the sales tax at 10 
percent in order to increase the measure's chances of passage and 
avoid the specter of a black market driven by higher taxes. 
Meanwhile, Democrats insist that the higher sales tax will pass and, 
if not, the legislature can always enact fees on the industry.

"If it doesn't pass, instead of tax the heck out of you, we'll fee 
the heck out of you," said state Rep. Jonathan Singer, a Democrat, in 
last week's debate.
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MAP posted-by: Jay Bergstrom