This coming from the same guy who said higher taxes are a great way to support the black market …
On July 1 of this year, recreational pot smokers in Colorado were going to have their 10 percent sales tax lowered to 8 percent — saving them about 50 cents on an average priced 1/8 oz. of weed. Instead, the governor is asking for it to be boosted to 12. This all because housing values are astronomically high right now.
Wait, what?
As is always the case, funding for schools in the state is about $135 million short. This massive discrepancy is because of something nestled in Colorado’s state constitution called the Gallagher amendment. It’s a provision that says values of residential homes can make up no more than 45 percent of the state’s overall assessed value, at least that’s how the Denver Post explains it. “When home values rise at a faster clip than that of commercial properties, as they have in recent years, it can trigger a statewide cut to residential tax assessments,” it adds.
For the past few years, the state has seen a substantial boost in its marijuana tax cash fund, a fancy pocketbook that appropriates incoming money to various state agencies including the Dept. of Human Services, Dept. of Transportation and the Attorney General’s Office, among others. That fund, however, doesn’t see a dime until $40 million is paid to a public school construction account, a requirement citizens asked for when Amendment 64 was voted on.
But the state topples that 40-mil pretty quickly. In the fiscal year ending on June 30, 2015, Colorado collected damn near $70 million in taxes from pot, close to twice as much as the $42 million from booze. Ongoing projections estimate that taxes from marijuana could be more than 4 times that of alcohol in the coming years.
The industry has brought in so much, in fact, that during Nov of 2015’s election cycle, voters had to reject a refund due to the state collecting over $25 million more than what it had projected in the first place.
The government paying back its citizens for smoking too much weed — who would ever have thought?
Currently, the effective tax rate on recreational pot is around 29 percent, depending on which city you’re buying from. If Hickenlooper (a man who made a fortune selling beer) gets his way, it’ll look more like 31 — far higher than most states which now have a system of legalization in place. By comparison, tax on cigarettes is about 31 percent and is a steal on beer at about 8 cents a gallon.
The latest isn't a surprising move by a brewery magnate that has always been vocal about his opposition to state legal weed. It is surprising, however, coming from a guy who a little over a year ago applauded the cannabis industry for successfully combating a black market while citing a state-sponsored analysis that found higher taxes means a stronger illegal system.
“We still have a black market, and we want to moderate our taxes to make sure that the risk of someone selling illegally. … We want to eliminate that,” Hickenlooper said in June of 2015. “And one way is to make sure there is not as large a price differential.”
On top of hiking pot taxes, Hickenlooper also wants to see senior citizens in Colorado get less of a tax break on their owned properties than they have in the past to fill the void Gallagher made. His proposal includes a cut to the senior homestead property tax exemption, allowing grandma and grandpa to only claim the first $100k of their home’s value — it’s now currently at $200k.
Both propositions will have to get the go-ahead of Colorado's House and Senate though, so nothing’s set in stone yet.
But this is Politics 2017, stranger things have happened.
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