Pot Industry Leaders Willing to Give Back Millions of Dollars to Colorado State Officials
The people making Colorado high (legally) say they are only too happy to give back tens of millions of dollars in state tax revenue. Colorado finds out Nov. 3 if voters will also be willing to give up a huge refund or will decide to be buzzkills who ruin the party.
Colorado voters approved the legalization of recreational marijuana in 2012. A year later, they passed Proposition AA to tax marijuana sales.
The reaction to the first legalized recreational marijuana sales in the nation was greater than expected.
As a result, the marijuana tax pulled in much more revenue than was forecast by Colorado tax officials. state Revenue Department officials undershot their estimate of marijuana tax receipts by $270 million.
Now, under the formula included in the state’s Taxpayer’s Bill of Rights Amendment, Colorado will be forced to return $66.1 million of the tax revenue to the marijuana industry, taxpayers, and pot smokers.
The Colorado Taxpayer’s Bill of Rights Amendment that was approved by voters in 1992 is meant to prevent state and local governments from raising tax rates without voter approval. In addition, government officials cannot spend revenues collected under existing tax rates if revenues grow faster than the rate of inflation and population growth, without voter approval.
TABOR also required state officials to estimate the revenue collected in the first year of new taxes. If the revenue exceeds estimates, some of the difference has to be returned to taxpayers and the industry that was taxed.
Proposition BB, if approved by Colorado voters, would allow the state to circumvent the Taxpayer’s Bill of Rights in this case and keep the money.
But if voters reject the proposition, $25 million would be refunded to taxpayers, $24 million would go back to the people who grow marijuana sold in the state, and $17 million would be returned to the people who bought and smoked the dope.
A bipartisan group of Colorado politicians is backing Proposition BB, as are leaders of the state’s marijuana industry. But a group known as “NO on Prop BB” is urging voters to reject the idea, just as they would stop anyone from taking money out of their wallets.
Colorado Gov. John Hickenlooper (D) said the state needs the excess tax revenue generated by the marijuana tax to invest $40 million in school construction, and paradoxically, $12 million in marijuana education.
"All the pot revenue that comes in -- our goal is to regulate marijuana, to make sure our kids don't get access to marijuana and, as the voters originally intended, that we build buildings to improve our K-12 education," Hickenlooper told KUSA-TV in Denver.