|RATIONALE FOR A
3% COUNTY TAX ON RECREATIONAL MARIJUANA
Livingston County has placed on the ballot for the August, 2023, election a provision for a 3% tax on recreational marijuana sales in the county. Here is our rationale for this decision.
Last November, the voters in Missouri passed a Constitutional Amendment placed on the ballot by an initiative petition by a vote to 53% yes to legalize recreational marijuana. Effective in February of this year, marijuana shops that offered medical marijuana were eligible to apply for licenses to sell recreational marijuana. Currently in Livingston County, we have one location that has a license to sell both medical and recreational marijuana.
The Constitutional Amendment passed by the voters provides for a 6% sales tax paid to the State of Missouri, and it also allows for local governments to submit to voters a 3% tax by a city and a 3% tax by a county for recreational marijuana sales. In our case, the city of Chillicothe and Livingston County can ask for a 3% each, for a total of 6%.
At our County Commission training in March, which had the commissioners from every one of the 114 counties in Missouri, the commissioners were asked, by a show of hands, how many of those counties had placed the 3% recreational marijuana tax on the ballot on the April 2023 ballot. The vast majority of the Commissioners raised their hand, noting that they had placed this measure on the ballot.
Our county chose not to do this in April because the city of Chillicothe had a measure already on the ballot to extend the capital improvement tax. Chillicothe is obviously a big part of the county, and we thought it would not be advisable to complicate or confuse voters with two separate issues on the same ballot. Therefore, the county chose to place this 3% tax on recreational marijuana on the August ballot, and the city is doing the same.
What are the reasons for these taxes on recreational marijuana? There will be increased costs to the county and city governments that the extra revenue will be used to offset, at least partially. Some of those costs from collected data include an increase in health care, estimated at $2200 per year for heavy users, $1250 per year for moderate users and $650 for light users. Additionally, from the data of other states that voted in recreational marijuana before Missouri, like Colorado, we know that there is an increase in DUI arrests and an increase in fatal accidents, as well as significant increases in workplace injuries and accidents and employee's absenteeism.
It should be noted that this proposed sales tax is a tax on recreational marijuana only. This is not a tax on medical marijuana.
Studies show that marijuana use can have negative effects on memory, learning ability and attention and in some cases can lead to psychotic disorders and schizophrenia, especially in young adults whose brains are not as fully developed. Furthermore, there has been a significant increase in poison control for young children who have accidentally eaten candy or brownies laced with marijuana. It should also be noted that the current concentration level of THC in marijuana is anywhere from 3 to 10 times more potent than 20 years ago.
In Livingston County, we plan to use the extra funding from the 3% sales tax, estimated at $150,000 annually, to help offset our increased costs of the 911 Emergency Call Center. Currently, the only source of revenue for the 911 center are the telephone land line fees, which continue to decrease at a very rapid rate as people switch to cell phones.
The cost of running the 911 center is approximately $650,000, which is offset by approximately $130,000 of phone landline fees. Some counties have an additional sales tax to fund their emergency center. In Livingston County, the total sales tax is currently 7.975% (4.225% state sales tax, 2.5% city sales tax and 1.25% county sales tax). There is a 1.00% additional sales tax in the Tax Increment Financing District, but this tax is assessed in a small part of the county. Our 7.975% sales tax is lower and compares very favorably to many counties in the state, especially in the larger cities which is an important selling point for our town and county. As a result, we prefer not to raise our sales tax from existing levels and would prefer to help fund the 911 center with a sales tax directly from the sale of recreational marijuana, as allowed from the new Constitutional amendment.
In addition, the City of Chillicothe is seriously considering a new law enforcement center in the next several years. We believe it is important for our Sheriff's department to be in the same building with the city police and 911 dispatch, as they are now. Therefore, our county plans to be part of this new building project by helping design the Sheriff Department's needs and then leasing this space on a long-term basis from the City, who owns the property. This will be an expensive change, and this new revenue from the marijuana sales tax will help make this project possible.
As mentioned above, our best estimate for the income that would be generated from a 3% sales tax for the county is $150,000. These funds will help offset funding needs for our share of the new law enforcement center and our 911 deficit.
This is our rationale for placing this 3% county tax on the August ballot. Feel free to contact us if you have additional questions.