Guest Opinion: Measure 91 will snuff out local tax measures
“City councils discover gold on marijuana bushes!”
That could be a headline for the new Oregon gold rush playing out in city council chambers throughout the state. They aren’t talking about shaking the bushes and holding their pockets open; what they are talking about is shaking (down) anyone who wants to participate in the marijuana market. And they don’t refer to shaking down but to the more acceptable levying of a (sin) tax on those who would engage in the marijuana market.
Who could fault such far-seeing council members who heard Measure 91 would not allow them to tax marijuana and jumped up to levy marijuana taxes before passage, beating some mythical “deadline” and being safely grandfathered in. The theory seems to be that until Measure 91 passes, there is no law prohibiting them from taxing marijuana, and therefore they can.
Here is the proposed tax prohibition that spurred the rush:
Section 42. State has exclusive right to tax marijuana. No county or city of this state shall impose any fee or tax, … in connection with … marijuana items.
City attorneys around the state testify that the gate is open for taxation until Measure 91 passes and do so after hopefully having read the measure. There is no shortage of police agencies forecasting trouble with legal marijuana and encouraging taxes for the public good, both to raise cash and to discourage use.
City councils have merely to look north to Washington to note that the high taxes there do seem to somehow lessen legal use, as does the limited legal supply. There can’t be anything wrong with that, can there? Cities can strike a stern pose of disapproval, fill their coffers and assume a tough political “So sue us!” stance ( hoping that really doesn’t happen).
There is no denying that there are many public needs that could be better funded, and Measure 91 recognizes that. There are taxing provisions that detail not only the tax rates for various marijuana items, but also provide statutory directives as to how those tax revenues shall be distributed. Taxes would be levied on dried marijuana flowers at a rate of $35 an ounce, marijuana leaves at a rate of $10 an ounce and marijuana plants starting at $5 a plant.
Measure 91 stipulates that of the tax proceeds, 40 percent would go to the Common School Fund; 20 percent to state mental health, alcohol and drug services; 15 percent to the Oregon State Police; 10 percent to cities for law enforcement; and 10 percent to counties for law enforcement. The creators of Measure 91 understood that there may be a possible burden on state agencies and local governments and provided assistance for relieving those burdens.
Some argue that those rates are too low, and more money could be raised If rates were increased. Many cities see the situation as begging for them to step in and raise taxes on their own to meet whatever criteria they believe constitutes a sufficiency. Professing needs beyond law enforcement helps many cities readily accept arguments from opponents of legalization that portray social negatives and societal disruption as the inevitable result of legalization and look for local taxes to solve whatever problems arise.
On the face of it, the answer to the question of local taxing ability appears to have been decided by the cities as falling in their favor. After all, if the city attorneys say its OK and not to worry about Section 42 because the cities will have acted prior to Measure 91 possibly taking effect, what could be the problem? The state will get taxes, locals will get taxes and all will live happily ever after.
Well, while Section 42 is found a long way into Measure 91’s wording, items found in the other 44 sections should have interested anyone proposing local taxes who professed to have read Measure 91. For example, there is Section 58 in edited form below:
Section 58. Marijuana laws supersede and repeal inconsistent charters and ordinances. Sections 3 to 70 of this Act … shall fully replace and supersede … all … local ordinances inconsistent with it. Such … ordinances are …repealed.
Oh! Like those local taxing measures we have been discussing? You mean Measure 91 kills them? You mean all that gold isn’t going to be real?
Yes, the promise of gold from local taxes on marijuana is the iron pyrite of this gold rush. Fools gold! As in “Fools rush in!” I am sorry, cities, but that grandfather you were depending on looks dead!
Laird Funk of Williams was the chief petitioner for the first Oregon marijuana legalization measure in 1986.