Regulate it and tax it! In the official proposal dated Feb. 18, Colorado’s Gov. John Hickenlooper requested an additional $28 million in state funding for regulation of pot in the state for the time period July 2013 through July 2015 (two fiscal years). There was already $29 million allocated for enforcement and public safety in 2013. Of course, those state funds would easily be offset by the sales tax generated right? Not so much.
From Big Government.
… in January of 2014, Colorado only brought in $2 million [in sales tax] from recreational pot shop sales.
From CNN Money.
Colorado raked in about $2 million from taxes on recreational marijuana in January, the first month it was legal to sell non-medicinal pot in the state.
I’m thinking Jan. 2014 was a banner sales month in the state just because it’s so new, but even if the high sales continue, that’s income of $48 million over two years, as compared to $57 million in state expenses. They lost $9 million. They did bring an extra $1.5 million in for medical sales for the month, but that revenue has already been coming in prior to July 2013.
The annual state income was estimated to be $70 million in the measure approved by voters, and the governor had a more bullish $98 million per year estimate. (NORML uses overall tax revenue figures in the billions.) From Bloomberg, dated Dec. 31, 2013.
Colorado projects $578.1 million a year in combined wholesale and retail marijuana sales to yield $67 million in tax revenue, according to the Legislative Council of the Colorado General Assembly. Wholesale transactions taxed at 15 percent will finance school construction, while the retail levy of 10 percent will fund regulation of the industry.
The grand plan was sold to voters in Colorado as a great tax generation scheme, and it looks possible the state will barely break even, and could lose money after hiring and spending for the “regulation” side of the equation.
I want to point out I really don’t care if pot is legal or not, it’s the fact the politicians and the folks on the pro-legalization side always point to the tax benefits for the state and local community, which is total hogwash.