Pubdate: Wed, 27 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

COUNTY TAKES POT TAX PLAN OFF BALLOT

Just weeks after putting the measure before voters Nov. 8, 
supervisors backtrack amid pushback.

November's ballot will be crowded with tax initiatives, but a Los 
Angeles County proposal to fund efforts on homelessness with a tax on 
marijuana won't be one of them.

County supervisors voted Tuesday to pull back an initiative they had 
previously approved for the ballot, which would have placed a 10% tax 
on gross receipts of marijuana businesses, with the money to be used 
for housing and services for the homeless.

The supervisors voted 3 to 2 this month to place the marijuana tax on 
the ballot. It was a last-ditch effort after several other tax 
options to raise money for homelessness ran into roadblocks.

The county first pursued a "millionaires tax" on highincome earners, 
which would have required a change in state law before it could go 
forward. County efforts to lobby for legislation granting that 
authority were unsuccessful.

The supervisors also considered a quarter-cent sales tax and a 
property tax, but those proposals did not get the votes needed to 
place them on the ballot, in part because of concerns that they would 
compete with other sales and property tax proposals on the ballot.

The marijuana tax would have raised less money than the other 
options. County analysts estimated that it would have eventually 
brought in $78 million to $130 million a year, with most of that 
coming only if California voters legalize recreational use of 
marijuana in November. Even then, the taxes on recreational marijuana 
could not have been collected until 2018.

Supervisor Sheila Kuehl, who proposed the marijuana tax measure, 
later changed course and asked See page 23

 From page B3 her colleagues to pull it back.

Kuehl said there had been pushback from some homeless service and 
drug treatment providers who thought the county should not be seen as 
promoting marijuana legalization. Kuehl said she was worried that 
without their support, the measure would not get the two-thirds voter 
support needed to pass.

She pointed to $150 million in initial funding the board approved in 
February to carry out new efforts to reduce homelessness, including 
about $100 million in this year's budget.

"We're still very serious about homeless services," Kuehl said.

She and Supervisors Michael D. Antonovich and Mark Ridley-Thomas, who 
both opposed the tax in the initial vote, voted Tuesday to scrap the 
measure. Supervisors Hilda Solis and Don Knabe were absent.

Marsha Temple, executive director of the nonprofit Integrated 
Recovery Network, applauded the decision to pull back the marijuana tax.

"I was very worried that we were sending a very wrong message to our 
clients, who we encourage to take steps to reduce or eliminate their 
dependence on drugs," she said.

But she urged the board to pursue a quarter-cent sales tax, which 
would raise an estimated $355 million a year.

Ridley-Thomas had pushed for that option, but it fell short of the 
four-fifths vote required to put it on the November ballot.

Some medical marijuana business owners and recreational marijuana 
legalization advocates supported the marijuana tax proposal, hoping 
that it would signal a relaxation of the county's current ban on 
marijuana businesses in unincorporated areas.

But others were skeptical of the proposal, saying the county should 
lift its ban before looking at taxes.

Tomer Grassiany, a medical marijuana business owner and member of the 
Los Angeles Cannabis Task Force, said he wants to see the ban lifted 
and pointed out that if that occurred, the county would be able to 
share in taxes collected by the state. But he was skeptical of a 
special tax for homeless services.

"While I do think that homelessness is a big problem, I don't 
necessarily agree that cannabis is the one that should be paying for 
it," he said.

Others questioned whether placing too many taxes on marijuana would 
discourage black-market operations from crossing into the legal economy.

If legalized, recreational marijuana businesses would be subject to a 
state tax of 15% on gross receipts. A portion of the proceeds would 
go to local governments, but only if they do not ban marijuana sales 
within their boundaries. Marijuana businesses would also be required 
to pay existing state and local sales taxes.

Elizabeth Hawley of the Valley Industry and Commerce Assn. told the 
supervisors another county tax could have the opposite of the intended affect.

"Homeless funding would be reliant on the legalization ... of 
marijuana, but the taxes on this product will disincentivize existing 
illegal operators from trying to come out and comply with local law," she said.

Although it appears unlikely that county supervisors will agree on 
another homeless tax measure in time to place one on the November 
ballot, voters in the city of Los Angeles will be deciding on a city 
proposal to issue $1.2 billion in bonds to build more housing for the homeless.

That money, unlike the proceeds of the various tax proposals 
considered by the county, could not be used for services.

Voters are also expected to decide in November on a countywide sales 
tax increase to fund transportation projects, a parcel tax for parks 
and a community college bond measure.

The county could try for a March 2017 ballot initiative on homelessness.

The makeup of the board will change after November's election, when 
Antonovich's and Knabe's seats will be up for grabs.
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MAP posted-by: Jay Bergstrom