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State takes first stab at estimating pot revenue haul

There will be uncertainty until the legalized weed revenues begin to waft in.
A marijuana plant growing in a national wildlife refuge.

A marijuana plant growing in a national wildlife refuge. U.S. Fish and Wildlife Service

The first estimate of tax revenue from Washington's pot sales had to be made. And the Washington Economic and Revenue Forecast Council unveiled its first guess Wednesday.

The council estimates that the state's revenues will be $51.2 million for 2015-2017 and $138.5 million for 2017-2019. That's just under $190 million for those four years.

The state council's executive director, Steve Lerch, said the council's staff anticipates a ramping up of marijuana sales that will somewhat level out after 2017-2019. However, he anticipated a slight rise in those years due to normal growth in Washington's population.

Lerch cautioned that these estimates could easily be wrong because there is no precedent for this type of calculation. State officials said Wednesday that regional drug lords were not consulted for their market expertise. 

The state marijuana taxes will be 25 percent of the sales from growers to producers, 25 percent of the sales from processors to retailers, and 25 percent of the sales from retailers to consumers.

So far, the state Legislature has avoided using any marijuana tax revenues in its budget calculations. "We're very cautious about budgeting marijuana money," said Senate Republican Leader Mark Schoesler, R-Ritzville.

Beyond the first-ever estimate of marijuana income, the Wednesday's revenue forecast was fairly bland. It predicted that Washington's government will raise $30 million more than expected in the current 2013-2015 budget biennium, and will gather an extra $82 million over what had been previously predicted for 2015-2017. Both numbers are less than 1 percent of the current $33 billion state-operating budget. "Flat is the new up," said Rep. Ross Hunter, D-Medina.

Hunter, chairman of the House Appropriations Committee, and Sen. Andy Hill, R-Redmond and chairman of the Senate Ways & Means Committee, said Wednesday's revenue forecast won't have much of an effect on calculations for a potential 2014 supplemental budget.

This year, the Senate is supposed to unveil its supplemental budget proposal prior to the House version. Currently, the Senate Majority Coalition Caucus is undecided on what course it will take -- introducing a supplemental budget proposal or saying no new budget should be proposed. The caucus's proposal is expected to be made public next week when the current legislative session will have less than 18 days to go.  Gov. Jay Inslee wants $200 million to $400 million in the supplemental budget — $200 million for routine budget adjustments, and up to another $200 million for Washington Supreme Court-order education improvements plus teacher cost-of-living raises. The House Democrats want a supplemental budget, but have been mum on how much they believe it should be.

On the longer term revenue prospects from marijuana sales, Washington expects to soon use Colorado's just-released initial figures for its pot-tax revenues in order to start comparisons. According to Associated Press, Colorado believes it will receive nearly $100 million next year from its legalization of marijuana. Retail pot sales are already occurring in Colorado. Washington is still setting up the regulations for a sales and distribution system here.

For exclusive coverage of the state government, check out Crosscut's Under the Dome page.

John Stang is a longtime Inland Northwest newspaper reporter who earned a Masters of Communications in Digital Media degree at the University of Washington. He can be reached by writing editor@crosscut.com.


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Comments:

Posted Wed, Feb 19, 10:28 p.m. Inappropriate

Marijuana revenues will fall far short of expectations, the State will be left subsidizing an expensive, over regulated monopoly. You voted for it, enjoy.

Cameron

Posted Fri, Feb 21, 5:50 a.m. Inappropriate

We beat them in the Superbowl, but they're kicking our ass at this.
Our legislature is mediocre. At best.

BlueLight

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