Friday, February 21, 2014

Marijuana Legalization and Taxation: An Opportunity for New York

Governor Cuomo and the legislature should pay close attention to the initial results in Colorado and Washington:
In the budget proposal that Mr. Hickenlooper released Wednesday, his office said the state could collect about $134 million in taxes from recreational and medical marijuana for the fiscal year beginning in July. He proposed to spend $99 million on programs including substance-abuse treatment, preventing marijuana use by children and teenagers, public health and law enforcement.“This package represents a strong yet cautious first step toward ensuring a safe and responsible regulatory environment,” Mr. Hickenlooper wrote in the proposal.In Washington, where retail sales of marijuana are expected to begin in June, budget forecasters estimated Wednesday that marijuana could bring the state nearly $190 million in taxes for the four years beginning in the middle of 2015. That money would go to a variety of health and substance-abuse programs, and the state’s general fund.“Every governor and legislator in the country will be like, ‘Hey, check out these numbers,’ ” said Reuven Carlyle, a Democratic state lawmaker from Seattle who is chairman of the House Finance Committee.For marijuana advocates, taxes were one of the major selling points of legalization. They have said that expanding the market for the federally prohibited plant could give states money for school construction, health care, substance-abuse programs and public health. Colorado’s legalization measure said $40 million in tax revenue would go toward school construction, and in November, voters across this otherwise tax-averse state overwhelmingly approved 25 percent taxes on recreational marijuana.
There are many good reasons to support legalization.  I've mentioned some of them in the past: better allocation of resources, ending discriminatory enforcement, eliminating an unwarranted intrusion into people's privacy, eliminating incentives for criminals, elimination of violence that goes hand in hand with trafficking.

But there's also the dollars and cents issue.  There's an enormous black market out there to be brought out of the underground and added to the tax base.  There is no shortage of worthy projects for that money.

No comments: