Among readers’ most-asked questions on the eve of Tuesday’s election — besides what the party affiliation is of judges on the ballot — is why they are being asked to pay more taxes when the state seems to be rolling in marijuana money.
“Where did all the pot money go? I thought the money raised by legalizing marijuana was going to fund our schools and fix our roads,” asked one reader, who wished to remain anonymous, through our Ask the Indy feature.
The short answer is that schools and roads are extremely expensive; marijuana taxes and fees cover only a tiny fraction of their budgets.
Two ballot measures before Colorado voters would raise taxes for transportation and education. Proposition 110 would raise the sales tax to pay for a backlog of transportation projects. Amendment 73 would raise income taxes on Colorado’s high-earners, raise corporate taxes and could raise property taxes to pay for education needs. We have the breakdown on how both of these would work:
Why are these two ballot measures necessary? Well, many would argue that they aren’t, marijuana or no marijuana. But the question, “Where’s the marijuana money going?” isn’t hard to understand, given that retail marijuana is taxed at more than 30 percent and medical sales are taxed, too. Total marijuana sales topped more that $1.5 billion in 2017, according to the Colorado Department of Revenue.
Close to $250 million was raised from marijuana related taxes, fees and licenses in 2017, according to the Colorado Department of Revenue. As of September of this year, Colorado already surpassed $200 million from marijuana. But even if all of that money was injected directly into schools and roads, it wouldn’t come close to the amount of tax money projected to be raised from Amendment 73 and Proposition 110.
Taxes on marijuana in the state break down this way:
- 15 percent state special retail marijuana sales tax (was 10 percent until July 1, 2017).
- 15 percent state retail marijuana excise tax.
- 2.9 percent state sales tax on medical marijuana (included retail marijuana before July 1, 2017).
- Marijuana application and license fees.
Money raised from these four streams of taxes and fees goes to five different pots.
- Marijuana Tax Cash Fund (MTCF)
- General Fund
- State Public School Fund
- BEST Fund (a matching grant program for school construction projects)
- Local governments that have authorized the sale of retail marijuana
For a great breakdown of this, check out Westword’s coverage of Marijuana Industry Group’s video on where marijuana tax dollars go.
This graphic from the Colorado Department of Education shows the distribution.
The Marijuana Cash Tax Fund is split between agencies in Colorado’s government. Here’s how the fund doled out the money in 2017-2018:
- Human Services: $37,556,743
- Local Affairs: $22,477,965
- Public Health and Environment: $20,730,746
- Education: $20,419,330
- Higher Education: $3,300,000
- Agriculture: $2,209,783
- Governor: $1,726,824
- Judicial: $1,571,728
- Public Safety: $1,550,794
- Law: $1,036,766
- Transportation: $950,000
- Health Care Policy and Financing: $750,000
- Regulatory Agencies: $304,225
- Labor and Employment: $165,296
From all marijuana sources, education got $90.3 million for the 2017-2018 fiscal year, according to CDE. The state spent about $5 billion on education last year, meaning less than 2 percent of the budget came from marijuana. Combined local, state and federal spending on education topped $9.7 billion, so if marijuana funds are factored against total spending, they make up less than 1 percent of the education budget.
Amie Baca-Oehlert, president of the Colorado Education Association, said the money from marijuana is minimal and restricted, due to the requirement for schools to match grants from the BEST school construction fund.
“It has provided some help in certain districts and in certain places, but it’s certainly not the solution to our school funding issues that we have here in Colorado,” she said.
As for transportation, CDOT only received $950,000 for a marijuana impaired driving campaign, according to the legislature’s state Joint Budget Committee. That’s not even a tenth of 1 percent of its budget of $1.5 billion for 2017-2018.
The Colorado Department of Revenue also has a good overview of how marijuana tax money is distributed. And if you want to get really nitty gritty, plus get an eye-popping look at how marijuana tax revenue has grown, check out this page, also from the revenue department. In 2014, for example, revenues from marijuana taxes, licenses and fees totaled $67,594,323. From January through September of this year, the total was $200,710,655.
That is, yes, a lot of green.