When Long Beach voters join other Californians in November to decide whether to legalize recreational marijuana, they may also get the chance to decide if it should be taxed.
The City Council took a step Tuesday night toward putting a marijuana tax measure on the November ballot that would levy a 10 percent tax on the recreational drug and a 5 percent tax on medical marijuana. City officials don't know how much revenue the tax would raise, but they're looking for every penny to help eliminate an estimated $18.5 million budget deficit in the next fiscal year.
The vote came on what turned out to be big day for marijuana policy, as the Los Angeles County Board of Supervisors took a step toward banning medical marijuana dispensaries in unincorporated areas, and the Berkeley City Council advanced ballot measures that would expand marijuana cultivation in the city and increase a medical marijuana tax.
Then on Wednesday, the RAND Corp. released a study that casts doubt on the effects of all of these efforts. The report says that if voters approve Proposition 19 to legalize marijuana, the price of the drug could drop by as much as 80 percent, although consumption may increase.
Prop. 19 allows private cultivation and the use of marijuana, but it gives cities the ability to choose whether to allow the drug's commercial cultivation and sale. Long Beach officials want to put the recreational marijuana tax on the ballot just in case Prop. 19 passes.
Long Beach may face a challenge in taxing even the already legal medical marijuana, if Tuesday's vote is any indication.
The council voted 8-1 to have a public hearing on the proposed tax Aug. 3, when the council will vote again on actually placing it on the ballot. Councilwoman Gerrie Schipske cast the single vote of opposition, and that is all it would take to make the chances of the measure's passage slim.
To create a ballot measure that only needs over 50 percent voter approval, the council first must unanimously declare a fiscal emergency. If even one council member dissents, as happened Tuesday, the only other option is to do a ballot measure that would require two-thirds voter approval.
Schipske said that taxing medical marijuana goes against the council's past stance on the drug.
"I have great difficulty now taxing something that we have said is for medicinal purposes," Schipske said.
California voters legalized medical marijuana in 1996, and in recent years, many cities have seen a proliferation of dispensaries - Long Beach is estimated to have up to 85 of them.
In response, the council in March approved a strict new ordinance for Long Beach medical marijuana collectives that requires them to register, sets rules about security and other issues, and limits where they can be located. The permit cost alone is $14,742, which collective operators say is exorbitant.
Councilman Robert Garcia was the only other council member to speak out against taxing medical marijuana, but he voted to have the hearing next month, when he said the council can fully vet the issue.
Although medical marijuana advocates and patients didn't turn out in droves Tuesday as they did during several months of discussions about rules for collectives, a handful showed up to plead with the council. They said that just as regular prescription drugs aren't taxed, medical marijuana, which is a necessity for some patients, shouldn't be taxed.
"If recreational marijuana is passed in California and you choose to tax that, I fully encourage you to tax it, but I urge you to remember that patients do not pay taxes on medications, and please distinguish the difference between the two," said Long Beach resident Babaji Zeiger, who, for effect, dumped out a pile of bottles containing his medication for AIDS and other illnesses onto the speakers' podium in the council chamber.
Councilman Val Lerch responded that asking the voters to decide is the right thing to do.
"We're not making this decision," Lerch said. "We're talking about putting it on the ballot, and let the people make the decision."
Wednesday's RAND Corp. report puts into question how much money that decision could mean for Long Beach.
Although the state Board of Equalization has estimated taxing marijuana could raise more than $1 billion in revenue, the RAND study says that the price "could drop as growers move from clandestine operations to legal production."
The study says that the untaxed retail price of high-quality marijuana could drop to as low as $38 per ounce instead of an estimated $375 per ounce price today.
Oakland was the first U.S. city to tax medical marijuana collectives, raising $23,608 in 2008 with a tax rate of 0.12 percent. Voters there approved increasing the tax rate to 1.8 percent in July 2009, which it was estimated would raise $294,000.
Berkeley also taxes medical marijuana sales, and on Tuesday the Berkeley City Council moved forward its own ballot measures to greatly expand the number of cultivation sites in the city and to increase its marijuana tax.
Dispensaries there currently are taxed $1.20 per $1,000 in sales. The tax would rise to $25 per $1,000 of sales, which equals a 2.5 percent tax, far less than the one proposed in Long Beach.
Officials here seemed willing Tuesday to try to squeeze as much revenue as they can from marijuana. Most Long Beach council members supported the 10 percent tax, and Councilman Patrick O'Donnell suggested that he would like to see it go as high as 15 percent.
The Oakland Tribune contributed to this report.
NewsHawk: Ganjarden: 420 MAGAZINE
Source: Press Telegram
Author: Paul Eakins
Copyright: 2010 Los Angeles Newspaper group
The City Council took a step Tuesday night toward putting a marijuana tax measure on the November ballot that would levy a 10 percent tax on the recreational drug and a 5 percent tax on medical marijuana. City officials don't know how much revenue the tax would raise, but they're looking for every penny to help eliminate an estimated $18.5 million budget deficit in the next fiscal year.
The vote came on what turned out to be big day for marijuana policy, as the Los Angeles County Board of Supervisors took a step toward banning medical marijuana dispensaries in unincorporated areas, and the Berkeley City Council advanced ballot measures that would expand marijuana cultivation in the city and increase a medical marijuana tax.
Then on Wednesday, the RAND Corp. released a study that casts doubt on the effects of all of these efforts. The report says that if voters approve Proposition 19 to legalize marijuana, the price of the drug could drop by as much as 80 percent, although consumption may increase.
Prop. 19 allows private cultivation and the use of marijuana, but it gives cities the ability to choose whether to allow the drug's commercial cultivation and sale. Long Beach officials want to put the recreational marijuana tax on the ballot just in case Prop. 19 passes.
Long Beach may face a challenge in taxing even the already legal medical marijuana, if Tuesday's vote is any indication.
The council voted 8-1 to have a public hearing on the proposed tax Aug. 3, when the council will vote again on actually placing it on the ballot. Councilwoman Gerrie Schipske cast the single vote of opposition, and that is all it would take to make the chances of the measure's passage slim.
To create a ballot measure that only needs over 50 percent voter approval, the council first must unanimously declare a fiscal emergency. If even one council member dissents, as happened Tuesday, the only other option is to do a ballot measure that would require two-thirds voter approval.
Schipske said that taxing medical marijuana goes against the council's past stance on the drug.
"I have great difficulty now taxing something that we have said is for medicinal purposes," Schipske said.
California voters legalized medical marijuana in 1996, and in recent years, many cities have seen a proliferation of dispensaries - Long Beach is estimated to have up to 85 of them.
In response, the council in March approved a strict new ordinance for Long Beach medical marijuana collectives that requires them to register, sets rules about security and other issues, and limits where they can be located. The permit cost alone is $14,742, which collective operators say is exorbitant.
Councilman Robert Garcia was the only other council member to speak out against taxing medical marijuana, but he voted to have the hearing next month, when he said the council can fully vet the issue.
Although medical marijuana advocates and patients didn't turn out in droves Tuesday as they did during several months of discussions about rules for collectives, a handful showed up to plead with the council. They said that just as regular prescription drugs aren't taxed, medical marijuana, which is a necessity for some patients, shouldn't be taxed.
"If recreational marijuana is passed in California and you choose to tax that, I fully encourage you to tax it, but I urge you to remember that patients do not pay taxes on medications, and please distinguish the difference between the two," said Long Beach resident Babaji Zeiger, who, for effect, dumped out a pile of bottles containing his medication for AIDS and other illnesses onto the speakers' podium in the council chamber.
Councilman Val Lerch responded that asking the voters to decide is the right thing to do.
"We're not making this decision," Lerch said. "We're talking about putting it on the ballot, and let the people make the decision."
Wednesday's RAND Corp. report puts into question how much money that decision could mean for Long Beach.
Although the state Board of Equalization has estimated taxing marijuana could raise more than $1 billion in revenue, the RAND study says that the price "could drop as growers move from clandestine operations to legal production."
The study says that the untaxed retail price of high-quality marijuana could drop to as low as $38 per ounce instead of an estimated $375 per ounce price today.
Oakland was the first U.S. city to tax medical marijuana collectives, raising $23,608 in 2008 with a tax rate of 0.12 percent. Voters there approved increasing the tax rate to 1.8 percent in July 2009, which it was estimated would raise $294,000.
Berkeley also taxes medical marijuana sales, and on Tuesday the Berkeley City Council moved forward its own ballot measures to greatly expand the number of cultivation sites in the city and to increase its marijuana tax.
Dispensaries there currently are taxed $1.20 per $1,000 in sales. The tax would rise to $25 per $1,000 of sales, which equals a 2.5 percent tax, far less than the one proposed in Long Beach.
Officials here seemed willing Tuesday to try to squeeze as much revenue as they can from marijuana. Most Long Beach council members supported the 10 percent tax, and Councilman Patrick O'Donnell suggested that he would like to see it go as high as 15 percent.
The Oakland Tribune contributed to this report.
NewsHawk: Ganjarden: 420 MAGAZINE
Source: Press Telegram
Author: Paul Eakins
Copyright: 2010 Los Angeles Newspaper group
