Lawmakers inch closer to reopening the marijuana tax spigot for transit and arts

An RTD bus parked in Central Park Station. Photo by John Herrick

Senate lawmakers are moving forward with a bipartisan plan to restore funding to agencies that provide services like public transportation and grant money for the arts and science education.

The Senate passed a bill on Monday that would allow certain special districts like the Regional Transportation District and Scientific and Cultural Facilities District to once again collect sales tax on retail marijuana after a drafting error last year blocked the flow of revenue from pot dollars from going to the agencies.

The bill could save districts from facing an $8.6 million loss in expected sales tax revenue next fiscal year, according to the Legislative Council, in addition to the losses they’ve seen since July 1. But a legal question remains whether these agencies will have to seek voter approval again for the sales tax that voters already approved.

Lawmakers accidentally blocked special districts from levying a 2.9 percent tax on recreational marijuana sales last year in an effort to exempt hospital-provider fee from the state revenue cap. Gov. John Hickenlooper called lawmakers into a special session to address the issue, but it ended in a partisan stalemate. 

One lawmaker read the Colorado Constitution during a floor debate Monday, specifically citing Article 10 Section 20 on the Taxpayer’s Bill of Rights, or TABOR, to make the argument that lawmakers should put the tax back on the ballot for voter approval. This bill gives special districts the option to seek voter approval to reinstate the tax. Special districts contacted on Monday did not say whether they would put the tax on the ballot this year.

Last year’s political gaffe has cost RTD the most. Scott Reed, assistant general manager at RTD, said the agency has been losing about half a million dollars each month since last summer. The loss has been absorbed through shifting funding around and tapping reserves, Reed said. 

“We know that long-term we will have to make adjustments to the service that we offer,” Reed told The Colorado Independent prior to the vote. “It is very encouraging to see that there are bipartisan efforts underway to reinstate the funding mechanisms and correct the error.”

The bill will be taken up next in the House. Democratic leadership supports the bill.

Title photo: An RTD bus parked in Central Park Station.

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