Katelyn Baker
Well-Known Member
News-Miner opinion: It's something of a rarity in Alaska lately for government to find itself with more revenue than expected. But in a roundup of 2016 marijuana retail taxes released this week by the city of Fairbanks, revenue from the the sale of the drug is substantial higher than municipal projections, leading to a likely revenue surplus that could be important for the city. It's not as though municipal government is experiencing a revenue renaissance because of a "green rush" of marijuana sales, but the extra money comes at a time when local government is in serious needs of diversified revenue streams.
In figures released by the city this week, marijuana sales brought in $32,337 to city coffers in the form of a 5 percent tax on the drug. It's an impressive sum not just because it exceeds the city's projected pot tax revenue for its entire fiscal 2017 budget year with half of that year still remaining, but also because it only represents about two months of sales by three local retail establishments. Frozen Budz and Pakalolo Supply Co. opened their doors in the last days of October, and GoodSinse didn't begin sales until mid-December. Making the tax windfall more significant is the fact that it was constrained by short supply – high demand for marijuana caused local retail establishments to run out of the drug for weeks in late December and early January. Once supply is sufficient to satisfy demand and more establishments open this year, it's a safe bet marijuana tax revenue will be coming in at an even stronger clip than it has so far.
Even if marijuana tax revenue were to double or triple from its rate so far, however, it wouldn't make up a huge portion of municipal receipts. The city's 2017 budget weighed in at $35.2 million; even if it tripled from 2016 sales rates, marijuana tax revenue would only bring in about $582,000 per year, or 1.6 percent of the budget.
That said, $582,000 per year in revenue – or even $194,000, the amount the city would bring in if tax revenue simply held steady at 2016 rates – is certainly nothing to sneeze at. It's especially consequential because of the threat of lost municipal revenue sharing because of the state's budget crisis. Historically, revenue sharing money has been very important to city and borough improvements; marijuana revenue won't replace that money if it's lost, but it will at least be a help and a new source of income that will mitigate impacts to property owners.
There may well still be costs related to commercial marijuana that the city and borough have to bear; municipal officials should keep that in mind when budgeting and be conservative about allocating pot tax revenue in case unforeseen costs develop. But so far, local governments have been prudent to not expect huge windfalls from marijuana, and the result is a slightly rosier budget than forecasted.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Marijuana Tax A Bright Spot For City
Author: Staff
Contact: 907-456-6661
Photo Credit: Shutterstock
Website: News Miner
In figures released by the city this week, marijuana sales brought in $32,337 to city coffers in the form of a 5 percent tax on the drug. It's an impressive sum not just because it exceeds the city's projected pot tax revenue for its entire fiscal 2017 budget year with half of that year still remaining, but also because it only represents about two months of sales by three local retail establishments. Frozen Budz and Pakalolo Supply Co. opened their doors in the last days of October, and GoodSinse didn't begin sales until mid-December. Making the tax windfall more significant is the fact that it was constrained by short supply – high demand for marijuana caused local retail establishments to run out of the drug for weeks in late December and early January. Once supply is sufficient to satisfy demand and more establishments open this year, it's a safe bet marijuana tax revenue will be coming in at an even stronger clip than it has so far.
Even if marijuana tax revenue were to double or triple from its rate so far, however, it wouldn't make up a huge portion of municipal receipts. The city's 2017 budget weighed in at $35.2 million; even if it tripled from 2016 sales rates, marijuana tax revenue would only bring in about $582,000 per year, or 1.6 percent of the budget.
That said, $582,000 per year in revenue – or even $194,000, the amount the city would bring in if tax revenue simply held steady at 2016 rates – is certainly nothing to sneeze at. It's especially consequential because of the threat of lost municipal revenue sharing because of the state's budget crisis. Historically, revenue sharing money has been very important to city and borough improvements; marijuana revenue won't replace that money if it's lost, but it will at least be a help and a new source of income that will mitigate impacts to property owners.
There may well still be costs related to commercial marijuana that the city and borough have to bear; municipal officials should keep that in mind when budgeting and be conservative about allocating pot tax revenue in case unforeseen costs develop. But so far, local governments have been prudent to not expect huge windfalls from marijuana, and the result is a slightly rosier budget than forecasted.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Marijuana Tax A Bright Spot For City
Author: Staff
Contact: 907-456-6661
Photo Credit: Shutterstock
Website: News Miner
