Pubdate: Thu, 30 Jun 2016
Source: Sun, The (Yuma, AZ)
Copyright: 2016 The Sun
Author: Howard Fischer, Capitol Media Services


PHOENIX -- Arizonans would buy nearly $500 million worth of marijuana 
a year by 2020 if voters agree in November to allow its use here for 
recreational purposes, according to a new report.

The study by the staff of the Joint Legislative Budget Committee 
figures legalization would generate nearly $82 million in taxes when 
the program is fully implemented. That includes $74 million based on 
a tax rate of 15 percent of retail costs, with the balance coming 
from things like licensing dealers and growers.

That puts the price paid by consumers at the cash register north of 
$490 million.

Of what's collected, legislative budget staffers say $27.8 million 
would go to general aid to education, with an identical amount 
available to help schools pay for full-day kindergarten programs.

The analysis was prepared as backers of the initiative prepare to 
turn in petitions today with more than 250,000 signatures to put the 
issue to voters. Even with a certain percentage likely being 
disqualified, that should provide a sufficient margin to meet the 
legally required minimum of 150,642.

Backers of the initiative, funded largely with dollars from the 
national Marijuana Policy Project, have been touting the financial 
benefits of legalization. This, however, is the first state-sponsored 
analysis putting actual numbers behind the claims.

But Maricopa County Attorney Bill Montgomery, one of the leaders of 
the opposition, said none of this should sway voters into approving 
something he considers bad public policy. Montgomery said it does not 
take into account additional costs from allowing anyone age 21 and 
older use the drug, from additional addiction treatment and increased 
accidents to lower work productivity. And even if that were not the 
case, Montgomery said there's less there than meets the eye.

He called the $27.8 million a year in state aid to schools a 
"pittance," especially compared with the fact that voters just 
approved Proposition 123 which will generate more than $300 million a 
year. Put another way, Montgomery said, the money comes out to less 
than $26 a year per student in public schools.

By comparison, that $82 million estimate of total revenues from legal 
marijuana sales by 2020 compares to more than $71 million a year 
generated in taxes on alcoholic beverages in 2015, the most recent 
numbers available.

The numbers in the JLBC report differ somewhat from estimates 
prepared earlier this by the Tax Foundation. That group said 
legalization of marijuana and the 15 percent

tax that would go with it could generate $113 million.

But JLBC analyst Patrick Moran, who prepared the report, said that is 
based on an assumption that Arizona would have the same level of 
sales as Colorado. That, he said, is flawed.

"Even prior to legalization of marijuana in Colorado, Colorado had 
consistently significantly higher rates of marijuana use than 
Arizona," he wrote. Moran said recent figures from the National 
Survey of Drug Use and Health show Arizona had about 587,100 adult 
marijuana users in 2013, versus 705,900 in Colorado at the same time.

And Moran said there's something else at work: The Arizona measure 
would initially cap the number of places where the drug can be sold 
at fewer than 150, versus nearly 1,500 liquor stores in the state; 
Colorado has no such cap.

But the JLBC estimate is close to one prepared last year by the Grand 
Canyon Institute.

The revenues generated by that 15 percent levy on marijuana do not 
include what state and local governments can collect on top of that 
in sales taxes.

Moran figures the state tax would generate another $24.8 million 
2020, with cities and counties getting about $6.5 million of that in 
revenue sharing. On top of that, the sales taxes imposed by local 
governments would generate another $14 million.
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MAP posted-by: Jay Bergstrom