Pubdate: Sun, 11 Oct 2015
Source: Denver Post (CO)
Copyright: 2015 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Ross Kaminsky
Note: Ross Kaminsky is host of "The Ross Kaminsky Show" on Saturday 
mornings on 850 KOA.

YES: IT'S WHAT VOTERS WANTED

Proposition BB, the only statewide issue in Colorado's elections this 
November, asks voters to "allow the state to retain and spend $66.1 
million, which has already been collected, rather than refund it to taxpayers."

Supporters of limited and cost-effective government understand the 
importance of reminding politicians and bureaucrats whose money 
they're spending. Refunds of tax revenue are perhaps the single 
most-effective way of doing so. However, Proposition BB relates 
specifically to the refund of excise and sales taxes on marijuana, 
taxes approved by Colorado voters in 2013 through Proposition AA as 
required by the 2012 passage of Amendment 64, which legalized 
recreational marijuana in Colorado.

If BB were to fail, the functional impact would be for the state not 
to have collected any of the voter-approved 15 percent state excise 
tax or 10 percent state sales tax on retail (non-medical) marijuana sales.

Two key points, as explained by the Legislative Council staff:

A $153.6 million tax refund required by the Taxpayer's Bill of Rights 
(TABOR) based on state collections of sales, income, gasoline and 
other taxes - the first such refund for a decade due to Referendum C 
and the subsequent recession - will occur regardless of whether 
voters approve Proposition BB. (Retail marijuana taxes are excluded 
from TABOR limits because they were separately passed by taxpayers.)

A possible refund of marijuana tax revenue has only become an issue 
because the state underestimated its non-marijuana tax collections in 
FY 2014-15. Colorado took in about $270 million more in TABOR-limited 
taxes than predicted while taxes on retail (aka recreational) 
marijuana came in slightly below estimates. The underestimation of 
non-marijuana taxes has ironically triggered a possible refund of 
correctly estimated marijuana taxes.

If Proposition BB fails, $49 million will be returned to taxpayers 
through a refund of $25 million to Colorado income-tax payers and $24 
million to Colorado retail marijuana cultivators. For a family 
reporting a joint adjusted gross income of $60,000, the tax refund 
would be $14.

To achieve the $66.1 million total "refund," on Jan. 1, 2016, the 
retail marijuana sales-tax rate will be slashed from 10 percent to 
0.1 percent until the state has forgone $17.1 million in tax revenue. 
During that period, the share of retail marijuana sales-tax revenue 
that goes to local governments will be cut in half, from 15 percent 
to 7.5 percent, reducing local government tax revenue by $6.3 million.

As always, those who want to keep tax money make a sympathetic claim: 
"While an average refund of $8 per person is a relatively small 
amount, $66.1 million will boost school construction and address the 
effect of marijuana legalization on communities and children."

As always, I find such "for the children" arguments condescending, 
even annoying.

However, the voters of Colorado explicitly legalized retail marijuana 
on the promise of tax revenue being directed to schools as well as to 
"funding for the regulation and enforcement of the retail marijuana 
industry and to fund related health, education, and public safety costs."

So as much as it pains me to support letting the state keep tax money 
that it might otherwise have to return, Proposition BB does nothing 
more than have state tax revenues be collected and spent as voters 
explicitly approved.

The potential of a refund of marijuana sales and excise taxes only 
exists because the government underestimated the state's receipts of 
non-marijuana-related taxes such as income taxes and ordinary sales 
taxes. For that to cause the state to effectively collecting nothing 
from marijuana sales - when the potential tax revenue was a clinching 
argument in allowing retail pot legalization to begin with - violates 
the spirit of the law and the intent of Colorado voters.
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MAP posted-by: Jay Bergstrom