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If pot were legal for possession in WA, OR and BC - what tax impacts?

Just wondering what the impacts on both tax revenues (from sales tax, B&O tax, etc) and cutting taxes spent for prisons, courts, cops, and otherwise productive taxpaying citizens being locked up would be.

Would it be something like 25 to 50 percent of every county's budget, 20 percent of every state's budget, and 10 percent of every city's budget, or what?

2 Answers

  • Sb_5516_press_conference_small
    Reputation: 68

    Tough question.   You've identified indirect costs that aren't easily quantified - the hardships to families resulting from a breadwinner being locked up or saddled with a criminal record , e.g. - which can translate to additional burdens on taxpayers.  On the other side of the coin, estimating revenues necessarily entails rough approximations of how the price of cannabis, and usage rates, would be impacted by bringing it under the control of a regulated market.

    How many taxes are collected, and where they are funneled, is also a question of legislative drafting.  For example, last session's HB 2401 , which would have regulated the cannabis market through the Liquor Control Board , proposed imposing a tax of 15 percent per gram .  It also would have created a "marijuana revolving account," with 98 percent of LCB revenues going to the Washington State Department of Social & Health Services' Division of Behavioral and Health Recovery for substance abuse treatment and prevention .  The remaining 2 percent would be retained by LCB for administrative costs.

    But we do have some figures to consider that come straight from Washington state agencies.

    According to the fiscal note for HB 2401:

    Revenues

    The Department of Revenue (state general fund) would receive roughly $46 million in the first year , increasing to $61 million in FY2019.

    The Liquor Control Board would receive $140 million in the first year , with 98 percent of that of that going to the marijuana revolving account for substance abuse treatment and prevention services , increasing to $173 million in FY2019.

    Savings

    Cities and counties would save $2,655 in court, prosecution, defense, and jail costs per each misdemeanor possession case not charged, for a potential minimal savings of $11,774,925 annually , based on the 4,435 misdmeanor possession cases that resulted in conviction in 2009.  However, there were likely an additional 8,000 cases filed in court in 2009 that didn't result in conviction .  There were 12,428 misdemeanor pot cases filed in Washington courts in 2008.  Cases that don't result in conviction still require prosecution, defense and court time - and can include jail time from an initial booking - so it's not unreasonable to estimate that annual savings could be closer to $20 million.

    Cities, counties, and the Washington State Patrol save $375 in officer time for each adult misdemeanor marijuana arrest that doesn't happen.  The fiscal note for HB 2401 identifies 8,273 of these in 2008, for a grand total of $3,102,375 in annual savings .

    Counties would save $7 million annually in prosecution, defense, and jail costs associated with the 700 marijuana-related felony sentences imposed in FY08.

    Roughly $1.5 million per year in state general fund savings would result from the Department of Corrections not seeing those 700 felony convictions, and another $222,700 per year from the Washington State Patrol Crime Lab not analyzing the pot in those cases.

     

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  • Avatar_default
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    Really depends on how you do it. I think a lot of the revenue numbers are highly exaggerated. Mostly because they are based off of the illegal price. Pot is not much harder to grow than tobacco or other crops and requires much less processing to be ready for sale.

    In a fully legal environment I would think prices in the couple dollars an ounce range would be about what you would see. Now way someone will pay hundreds for something that you plant and wait for it to grow.

    Sure you have your people who want high end hydroponic hybrid shit, but they are the minority. And really its not going to be harder then say designer orchids which are often hybrids or clones which require very precise growing conditions. Even then a hundred bucks for a whole plant is considered very very expensive.

    Now you could just stick a 20-40 dollar tax per gram on it, but then you have to enforce that and you lose some of the saving on that end. Plus you are right back where you started throwing people in jail. I mean I'll go to the store and buy corn, because growing it is hard and its cheap. But if for a little effort someone can grow something that will save them hundreds or thousands per year, you'll need some stiff penalties to discourage that or even sales only in state stores. Somewhat like we have with liquor except your dealing with something even easier to produce at home.

    I love the idea of legalization for rights and savings issues, but as a revenue generator, I think we'll be a bit disappointed.

    Just ask yourself what it really costs to grow marijuana in terms of land, labor, and seeds, plus a small profit margin.

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