Pubdate: Wed, 13 Jul 2016
Source: Los Angeles Times (CA)
Copyright: 2016 Los Angeles Times
Contact:  http://www.latimes.com/
Details: http://www.mapinc.org/media/248
Author: Abby Sewell

L.A. COUNTY PUTTING POT TAX ON BALLOT

10% Levy on Marijuana Businesses Would Go to Housing and Services for 
the Homeless.

Los Angeles County voters will decide this fall whether to tax 
marijuana businesses to help pay for housing and health services for 
the homeless.

The ballot measure, approved Tuesday by the Board of Supervisors, 
seeks to take a potentially significant new source of government 
revenue, from marijuana sales, and use it to address one of the 
region's oldest and most intractable problems. L.A.'s homeless 
population has been rising in recent years, and the proposed pot tax 
is part of a larger effort by city and county officials to finally 
put significantly more money behind easing the problems.

The board's 3-2 vote comes two weeks after the Los Angeles City 
Council agreed to place a $1.2-billion bond initiative on the 
November city ballot to build more housing for the homeless. The bond 
money could be used only for housing construction, not to provide 
services. Backers see both measures as a package and hope voters will 
approve both.

The county proposal calls for a 10% levy on the gross receipts of 
businesses that produce or distribute marijuana and related products. 
It would apply to medical marijuana operations as well as the 
recreational marijuana industry if California voters decide to 
legalize it in November.

County analysts estimated that the measure, which would require a 
two-thirds majority vote to pass, would raise as much as $130 million 
a year to pay for mental-health and substance-abuse treatment, rental 
subsidies, emergency housing and other services intended to get and 
keep people off the streets.

But how much revenue the tax would generate depends largely on 
whether California voters legalize marijuana and whether large 
numbers of illegal sellers enter legal venues. County officials 
estimate that only about $13 million in annual revenue would come 
from the medical marijuana industry.

If recreational marijuana is legalized at the state level, the county 
would not be able to begin collecting taxes on that industry until 
2018. In the meantime, the county and cities would need to set up 
their own set of regulations on commercial marijuana businesses.

Spurred by the growing visibility of homeless encampments throughout 
the county, there has been much talk in local government about a 
unified approach to addressing the problem. The most recent count by 
the Los Angeles Housing Services Authority found about 47,000 people 
were homeless throughout the county.

The county budgeted $100 million this year to carry out an ambitious 
new homeless agenda, but it does not have a dedicated source of funds 
for ongoing efforts.

Advocates and people who are currently or formerly homeless urged the 
supervisors to place a funding measure on the ballot.

Destiny Vazquez, 16, said she spent two years homeless off and on as 
a child, but now lives with her grandmother and volunteers with an 
organization that helps the homeless.

"I am here as their voice, because I didn't ask to be homeless 
either," she said. Her mother, Nereida Vazquez, 39, who said she is 
now homeless again, accompanied her daughter to the meeting.

Tuesday's vote comes after months of debate about the best way for 
L.A. County to raise more money for the homeless.

Initially, the board had hoped to pursue a "millionaire's tax" on 
high-income earners. But the county does not have the legal authority 
to raise income taxes, so officials pushed for a change in state law 
that would have allowed them to go forward.

After that effort failed, Supervisor Mark RidleyThomas proposed 
placing a property tax on the ballot and then backed a quartercent 
sales tax. Both of those plans would have raised more money than the 
pot tax. Neither proposal was able to get the needed level of support 
on the board.

A number of advocates urged the board to consider the sales tax, 
which would raise the most money - an estimated $355 million a year - 
and could be implemented more quickly than a marijuana tax. But most 
said they would also support a marijuana tax. "We know that we will 
not see another opportunity in terms of public attention on 
homelessness and voter turnout like we will in November," said Katie 
Hill, executive director of the group People Assisting the Homeless.

Supervisors Sheila Kuehl, Hilda Solis and Don Knabe voted for the 
marijuana tax, with Michael D. Antonovich and RidleyThomas voting against.

Kuehl and Solis hailed the vote as a major step toward addressing the 
county's homeless crisis. But Ridley-Thomas said that the county 
needed more time to look at the issues surrounding a marijuana tax 
and that he had not given up on the sales tax. Antonovich expressed 
concerns about the health and safety effects of legalizing marijuana.

Knabe said he is not a proponent of marijuana, but if California 
voters decide to legalize it, "we ought to get a piece of the action, 
because it will help those that we need to help."

Public health and law enforcement officials expressed concerns about 
whether high taxes on the legal marijuana industry would drive more 
consumers back to the black market. L.A. County Sheriff Jim McDonnell 
sent a letter that said the level of homelessness in the county is 
"dire," but urged the board to look at measures other than marijuana.

Collecting from marijuana businesses, which typically run on cash, 
would also raise potential security issues for county tax collectors. 
Treasurer-Tax Collector Joseph Kelly said his office might hire 
armored cars to pick up the money.

The supervisors went into a closed-door meeting ahead of the 
discussion of marijuana and the homeless tax, which were not on the 
closed-session agenda. Ridley-Thomas said the closed session was 
needed to talk about a "confidential attorney-client privileged 
communication" the board had received the night before. Kuehl and 
Solis argued that the issues could be discussed in public, but were 
voted down by the other three.

Kuehl said afterward that the supervisors had discussed the items 
that were on the closed-session agenda, but also discussed a memo 
from county counsel on potential liability and federal law issues 
related to marijuana.

"To me, it could have easily been said in public," she said, but 
added that she thought the topic was appropriate for closed session 
because it dealt with potential litigation.
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MAP posted-by: Jay Bergstrom