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Published on Friday, April 3, 2015

Marijuana rollercoaster ride continues

There were some new developments during the last 10 days on marijuana as the House and Senate released their budgets. Both budgets included $6 million per year ($12 million for the biennium) in marijuana revenue sharing for cities and counties. However, both houses still have very different approaches to revenue sharing beyond the dollar amount included in their respective budgets.

The House Appropriations Committee passed SHB 2136 Tuesday evening, and it now awaits further action. The committee did not significantly alter the bill, so it still includes a cap on the amount of revenue shared with locals and a sunset in 2022. We are working with a number of House Local Government Champions Caucus members to offer amendments to the bill once the House brings it up for a floor vote. We are asking they remove the cap and sunset and revise the model for how the funds are distributed to cities. Cities have asked that the revenue shared be increased to equal 10% of the total excise tax revenue. The House projection is approximately $270 million in marijuana excise tax revenue in the next biennium based on a 30% flat tax rate.

We want to express our appreciation to Rep. Chris Reykdal (D-Tumwater) and other members of the House Local Government Champions Caucus who worked on a budget amendment that would increase local revenue sharing to $22 million for the biennium. While the amendment wasn’t considered, it did offer an important opportunity to highlight the needs of cities.

The Senate’s approach has changed with the passage of a new corresponding bill on marijuana revenue sharing, SB 6062. SB 6062 provides for an ongoing, flat amount of $6 million per year for cities and counties in marijuana excise tax revenue and uses our preferred distribution method that was included in SB 5417. However, it was amended on the floor to allow jurisdictions that ban to be eligible to receive funds. SB 6062 does not include a sunset date but does sweep almost all other marijuana revenue into the Education Legacy Trust Account instead of spending it the way that was prescribed in Initiative 502.

When SB 6062 was heard in the Senate Ways & Means Committee, AWC testified with concerns. We expressed appreciation that the Senate was recognizing the need to share revenue with cities and that they had made an ongoing commitment to providing funding. However, the funding amount is insufficient to have an impact on local needs. AWC and the Washington State Association of Counties requested that the amount be increased to 10% of the total excise tax revenue. The Senate projection is approximately $330 million in marijuana excise tax revenue in the next biennium based on a 37% flat tax rate.

In the meantime, there hasn’t been any action on SB 5052 regulating medical marijuana, and the bill is still waiting to be brought up for a vote in the House. AWC strongly supports this bill and the need to reconcile medical and recreational marijuana.

We continue to work hard to convince both the House and Senate that the amount of local revenue sharing must be larger. Please continue to reach out to your local legislators and share the message of why your city needs revenue and what the impact of marijuana is on your community. Ask them to support providing 10% of the total marijuana excise tax revenue with local governments.

Categories: Marijuana