Prop BB reshuffles spending of pot tax money
October 30, 2015
DENVER — The only statewide ballot question in Colorado next week seems like a no-brainer: Should the state keep $66 million in marijuana taxes it has already collected to spend on schools and drug-abuse prevention?
The measure arose from an accounting error two years ago, when the taxes were first approved. And it has broad support, from Democrats, Republicans, the marijuana industry and nearly every newspaper in the state.
But the fine print of Proposition BB goes beyond allowing the government to keep the money it already collected. It rearranges the spending plan to give money to some new recipients, including the 4-H Club and Future Farmers of America — youth groups that never sought the handout and aren't keen on being associated with pot.
Lawmakers insist the marijuana money will be spent as voters generally intended when they approved a 10 percent sales tax and 15 percent excise tax on recreational pot in 2013. For example, the measure sends $40 million to a school construction fund.
"We are looking at trying to keep it related to helping kids stay away from drugs and also education efforts and things of that sort," said Rep. Beth McCann, a Denver Democrat. She leads the Tony Grampsas Community Board, which is getting $2 million from marijuana taxes to fund anti-violence efforts.
If the referendum is approved, the money will flow though state agencies to a variety of recipients, who have little choice but to accept it.
The youth groups are listed on the ballot measure, probably to enlist more support from voters. But in the case of 4-H, the money is actually going to the Colorado State Fair, which expects to receive $300,000 for renovations.
"Really, that money is going to be spent toward facility repair and remodels at the state fairground, which in turn supports FFA and 4-H members when they show at the state fair," said Kenton Ochsner, state FFA adviser with the Colorado Community College System. "I did not apply for those funds."
The story is similar at the Colorado Department of Education, which is getting $2 million for a new "school bullying prevention and education cash fund."
"We really haven't analyzed it yet and decided how the money would be put to good use," department spokeswoman Dana Smith said.
Another $200,000 goes to the Department of Law to train police. Roadside marijuana impairment could be the training topic, but the measure does not require the money to spend on anything pot-related.
An even bigger chunk, $8 million, doesn't have any designated recipient. That's because more taxes were collected than lawmakers expected when the ballot measure was written. They expected $58 million. The final tally was $66 million.
The measure's main author, Democratic state Sen. Pat Steadman, said the $8 million will go to the Marijuana Tax Cash Fund, which can be used for numerous educational and anti-drug efforts. But some worry that non-pot users could someday end up paying for programs initially funded by pot taxes.
"It's all for the kids, and that's great. I think the question is: Are you creating a new subsidy that is going to require longtime financial support?" asked Jessica Peck, a Denver-based attorney who specializes in marijuana law.
If Proposition BB fails, some $25 million in income taxes will be refunded to taxpayers whether they bought pot or not. Those refunds would run from $6 to $16 a person, depending on the filer's income.
Another $17 million in excise taxes would go directly back to those who paid it — the pot growers. Colorado would then slash the 10 percent sales tax on recreational pot to nearly zero for a time before eventually restoring the tax as marijuana sales climb.