Taxpayers, however, may stand to benefit if lawmakers decide to refund the tax revenue that comes in above last year’s $67 million first-year estimate.
According to a legal analysis conducted by the state and obtained by FOX31 Denver, the marijuana revenues are subject to the state’s Taxpayer Bill of Rights (TABOR), which will require lawmakers to take action if tax revenues from the new legal marijuana industry exceed the estimated $67 million in annual revenue that was anticipated in the 2013 Blue Book analysis of Proposition AA, the new sales and excise tax rates voters approved in November.
The legal memorandum from the Office of Legislative Legal Services was sent to members of the Joint Budget Committee Monday night.
The report, obtained by FOX31 Denver, is the result of more than a week of legal analysis aimed at providing some certainty to the unanswered question of what happens if revenues come in above that $67 million estimate.
The most current Dept. of Revenue estimate forecasts that the state will take in $107 million, exceeding the Blue Book estimate by some $40 million.
The conclusion: the state must lower the tax rate and either refund the excess amount of revenues above the $67 million estimate or refer a measure to the November 2014 or 2015 ballot seeking permission from voters to let the state keep and spend all of the tax revenue from recreational marijuana.
“It’s very difficult to figure out what the actual amount of marijuana tax revenue is going to be,” said JBC Chairwoman Crisanta Duran, D-Denver, who notes that the state will update its revenue forecast,including marijuana tax revenue projections, on March 18.
“Ultimately, one way or another, the people of this state are going to have a great say about how this extra money is spent. We have to follow TABOR and either take the decision back to the people of Colorado and ask them to keep these dollars or we have to make a refund.”
Rep. Cheri Gerou, R-Evergreen, also sits on the JBC but, unlike Duran, doesn’t see a referred measure to the November ballot as a real option.
“I think probably what’s going to happen is that, internally, the state will try and take care of it,” Gerou said. “I think it’s going to be a bit of a black eye if we have to go back to the voters with another amendment. Continue reading