For Gov. Peter Shumlin, Jan. 15, 2015 can’t come soon enough now that he has heard that the Fiscal Year 2015 General Fund Income Projections, could be $31 million below budget.
What makes the January date so compelling; it will be then that the governor and the Legislature will be given a report by Administration Secretary Jeb Spaulding. The report has to do with the financial impact of legalizing, in Vermont, the sale of marijuana for recreational use.
The legislation (S.247) authorizing the report also had language that dealt with setting a new cap on medical uses of marijuana, a pretext to provide cover (justification) for the real issue. Vermont wants to mirror Colorado and Washington and begin generating tax revenue from the sale of marijuana. And the tax revenue could be a windfall and erase the $31 million potential deficit in short order.
The state of Colorado collects 28 percent (excise and sales) tax on sales of marijuana. If Vermont had the same tax rates, at $100 million in annual sales here, $28 million would go to Montpelier -- and that is just for starters. Who knows how deep the market will be, given the fact that Vermont is next door to New York, Connecticut and Massachusetts.
Which gets me to my next point and that is it may be time to lease up vacant stores that dot so many of Vermont’s towns and villages. This should be done by locals and not left to out-of-state venture capitalists who I am sure are lining up at the border, ready to pounce, once Jeb Spaulding’s report is released.
In fact, the actual report, according to Katie Jickling’s piece in VTDigger, is being prepared by the Rand Corp. for $120,000, one sixth of which will come from Montpelier and the balance, $100,000 from Good Ventures, a philanthropic foundation.
Concurrently, with the work on the fiscal impact study, towns and villages should look to amend their zoning ordinances to ensure that there will be a quick approval cycle once the state gives the go ahead for the retail sale of marijuana, which we all know is a foregone conclusion.
Also, the Legislature should provide blanket immunity from liability, to store owners who will be selling marijuana. If the state is going to receive the tax revenues it’s only reasonable that they don’t subject store owners to fiscal responsibility that is to come from the abuse of the substance.
It will be important to consider the additional cost of policing that will follow legalizing the sale of marijuana. In Colorado there has been a substantial increase in police work resulting from that state’s introduction of the sale of marijuana.
The administration and the Legislature are ignoring the fact that the Vermont Chiefs of Police, the League of Cities and Towns, the Vermont Sheriffs’ Association and our state’s health commissioner (the latter according to Jickling) are against the sale of marijuana for recreational purposes.
And let’s not make the mistake that took place when the state got into the business of selling alcohol. The state has reaped the revenue and tax benefits but failed to provide for the care of those who have become addicted. Nor has the state ever owned up to the fact that our legal and police systems spend upwards to 80 percent of their resources dealing with alcohol abuse issues.
A forward thinking Legislature would set aside at least 75 percent of all tax revenues generated from the sale of marijuana to deal with the potential mental and physical health issues resulting from the sale -- and this will be, especially true for those who gain access and are under the age of 21
The real play now is to see if one can gain financial leverage from what is taking place in Vermont. And the best way in which to do so is to lease-up vacant stores in every Vermont town and village. The customers will come -- the Administration and Legislature are counting on it. Why else would the Shumlin Administration engage a think tank from California, funded in part by a San Francisco nonprofit?
The state has a spanking brand new 25-bed mental health hospital in Berlin, which will be quite adequate to deal with the carnage that will come once marijuana is sold in every Vermont town and village.
Don Keelan writes a bi-weekly column and lives in Arlington.