how local governments spend excise tax revenue

In The Weeds | Marijuana Excise Tax Pt 4: System Needs Work

What Does the State Do With its Share?

60 percent of the state’s marijuana excise tax revenue goes towards public health programs, The News Tribune reports. Most of that portion will help fund university research, Medicaid, surveys on marijuana tolerance, and will help balance the state health plan, the MRSC reports. Another $17 million goes to the WSLCB for regulation costs associated with recreational marijuana.

There have been talks by legislators to aim cannabis revenue at funding public education, but numbers wouldn’t support that. There’s only about $200 million in excise taxes leftover after it’s distributed to the proper places. Gov. Jay Inslee estimates it would take $2.75 billion to completely fund public schools over the next two years. Some legislators, like Ann Rivers, are adamant that the money should be set aside for education, The Seattle Times reports.

“I have had this discussion dozens of times, it doesn’t come close, it doesn’t come within 1,000 yards, it doesn’t come within several billion dollars of needs. It’s in the tens of millions rather than the several billion,” Inslee told The Seattle Times.

Click to see The News Tribune’s breakdown of i502 money.

What to Make of It All?

Recreational cannabis sales have collected $401 million in excise tax since 2014, per 502 Data, and will garner over $730 million total sales in the next two years, but it’s still pennies compared to the $41 billion that will occupy Washington’s general fund over the next two years, The News Tribune reports.

Local and state governments are facing similar circumstances. Marijuana excise tax payments are fractions of the total operating budget they go in. Jewell, Inslee, and Pettit all echoed similar sentiments of marijuana taxes not equaling enough to set aside for any designated purpose. Is that necessarily a bad thing if the money is just going into the general fund?

No, it isn’t.

At the end of the day, county and state governments are making anywhere from thousands to millions more dollars that they didn’t have before. The cost in regulating legalized recreational cannabis is relatively small, (depending on who you ask.)

It’s creating jobs within the state and helping people get medicine that wasn’t available before legally. It’s important to remember, the entire recreational system has only been running for three years. This voyage is new for everyone and there is no map for legislators. Washington and Colorado are the first to attempt legalization on this grand a scale, but the system needs work. The amount of money counties and cities receive compared to how much they generate is puzzling, because much of the groundwork for recreational marijuana legalization is laid at the local level.

One thing is for certain, the money will keep rolling in at exponential rates. People love to smoke weed, that fact is undeniable at this point. State and local governments will continue assessing what works and what doesn’t, and hopefully, the money will find a consistent avenue that can benefit our state in the best way possible.

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