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.

“We’ll figure out where our revenues come in, figure out how much we need to reimburse on the sales tax and then we won’t have to worry about this after this year.”

Lawmakers have the option of simply lowering the sales and excise tax rates on recreational marijuana to bring the final revenue total in line with the $67 million Blue Book projection.

But that would likely impact the $40 million in annual excise tax revenue allocated to school construction through the Building Excellent Schools Today (BEST) program.

“We could lower the sales tax and not charge any sales tax, which would mean we wouldn’t bring any money in but we also wouldn’t be taking care of K-12 education with BEST,” Gerou said. “So that’s probably off the table.”

It’s still unclear whether all taxpayers or just those who bought recreational marijuana would be eligible for refunds, should the legislature simply decide to go that route.

In a separate memo prepared in advance of the JBC’s Wednesday meeting, where lawmakers first discussed TABOR’s impact on marijuana revenues, JBC staff acknowledges that the Office of Legislative Legal Services analysis is fluid, being something that’s never happened before.

“This process is a new process as, to their knowledge, it has never occurred in the past,” the JBC memo states. “Therefore, much of what is being discussed is still subject to change if interpretations change over time.”

The state is also committed to the Blue Book estimate of $12.15 billion in total state fiscal year spending with the addition of the $67 million in additional marijuana taxes.

A refund would also be required should total state spending rise above that $12.15 billion mark; and, as of the December Legislative Council forecast, spending was projected to reach $12.167 billion — $87 million over the Blue Book estimate.

Add those two sums together and taxpayers could be looking at a total refund from the state of $107 million.

“It could actually cost the state money because we have legalized marijuana, but just for the first year,” Gerou said. “In the the 2015-16 budget cycle, that’s when we’re in trouble.”

Sen. Pat Steadman, D-Denver, was steamed at the TABOR snag, asking JBC staffers if it’s ever possible to raise taxes when revenues are growing.

“Voters got exactly what they voted for and it’s still a problem,” Steadman said. “It’s absurd.”

Gov. John Hickenlooper has proposed a separate $116 million spending plan for marijuana revenues that are left over after paying for school construction and offsetting county expenses for regulating the new industry will be directed to drug awareness campaigns, among other things.

Hickenlooper’s office acknowledged the legal analysis and noted that the question of whether marijuana revenues are subject to TABOR, and how so, is far from settled.

“This is an ongoing legal question, and we remain committed to respecting the will of the voters,” said Hickenlooper’s spokesman, Eric Brown.

State officials continue to examine legal questions around the issue.

One case they’re reportedly looking at is the Colorado Supreme Court’s 1994 decision inBickel v. City of Boulder, which could be interpreted in a way that affirms the state’s right to keep the additional revenue if it can be shown it made a “good faith estimate” of assessing what the marijuana revenue would be.