As the entire nation sits back and watches the legalization situation in Colorado, millions of dollars of tax revenue generated by recreational marijuana sales continue to roll in to the state. From the single month of January 2014, the city of Denver is expected to receive 3.5 million in tax money generated from recreational and medicinal marijuana sales that will not be wasted. Many are speculating on what the city will choose to do with the several millions of dollars in extra tax revenue created by the marijuana industry in just a few months.
When Colorado passed Amendment 64 in November of 2012, it was not known what type of taxes would be imposed on the sale of recreational marijuana. Voters in the state recently passed a 15 percent excise tax on top of regular sales taxes. Needless to say, when someone purchases marijuana in Colorado the normal price can skyrocket as high as 22 percent. That is not easy on the wallet, but obviously consumers in Colorado are willing to pay these taxes without second thought. After all, they are the ones who enacted the high taxes to begin with.
By the end of 2014, the city of Denver could see upwards of forty million dollars in tax revenue generated by the sales of recreational marijuana, so it is no wonder that folks are concerned about their hard earned money being wasted. There is flat out fear that abundance of tax revenue could be wasted on measures such as increasing the incarceration rates or banning large sized sodas like New York City did earlier this year. When Coloradans voted yes on Amendment 64 it was understood by all that the first forty million dollars of tax revenue generated by the state in recreational marijuana sales would go school construction. Do the math. That first forty million has come and gone extremely quickly. Rest assured, Denver Mayor Michael Hancock has responsible plans for spending the excess of tax revenue.
One area that is in need of immediate, unwavering attention is the ongoing regulation of the marijuana industry in Colorado. In a proposal last week, Denver Mayor Hancock suggested that this is where over half of the extra tax money will go. Just because it is legalized, does not mean that the market for marijuana sales is now an entrepreneurial free-for-all that wastes Denver tax dollars. Funds reserved for regulating recreational marijuana sales would go towards hiring administration for the marijuana industry such as tax auditors, fire safety experts and health inspectors to oversee the manufacture of edible marijuana.
Legalization of recreational marijuana sales also means hiring more law enforcement agents and forensic scientists. In light of the recent ethical problems that the Denver Police Department has had, using a quarter of this generated tax money to hire more qualified law enforcement officials would be highly revered by Denver citizens and not considered to be wasteful. The remaining quarter of the tax revenue budget is reserved for education, but there is some debate over what areas of education are most in need of funding. Officials want to make sure that money put in to education finance is effective. “We don’t want to just add money to education and hope there is an impact,” said City Budget Manager Brendan Hanlon. Youth marijuana prevention is one of the most important efforts for the state. The last thing Colorado wants is for legalization to be associated with increased usage among youth, or any age group for that matter.
By Sarah Gallagher