Marijuana: Amendment 64 study authors defend higher revenues than state predicted
Update:A Colorado Center on Law and Policy study predicting the economic impact of Amendment 64, the Regulate Marijuana Like Alcohol Act, has become a political football for proponents and opponents. Now, CCLP reps are defending the methodology of the report, whose totals differ from those of state officials.
The report, on view below, predicts that revenue generated by Amendment 64 could reach $100 million after 2017. However, Roger Sherman, campaign director for the No on 64 organization Smart Colorado, scoffs at the figure. "It's not a surprise that a report paid for by an out-of-state, pro-legalization organization, the Drug Policy Alliance, overstates the impact of legalizing marijuana for recreational use," he wrote via e-mail. "This report triples the estimate from the state's unbiased, non-partisan Office of Legislative Council in the Blue Book."
In responding, CCLP communications director Terry Scanlon stresses "that we have tremendous respect for the Legislative Council staff. We look at their work all the time and hold it in the highest regard."
A graphic from the Colorado Center for Law and Policy website.
However, he goes on, "we have some different factors than they do. We look at the state sales tax revenue, local sales tax revenue and the excise tax revenue, because Amendment 64 calls for an excise tax on marijuana."
Adds Chris Stiffler, a CCLP economist: "There's uncertainly what percent the excise tax will be, but up until 2017, it can be as high as 15 percent, so we ran the numbers at 15 percent," due in part to the presumption that legislators would likely approve the maximum, as they tend to do when it comes to so-called "sin tax" items like cigarettes.
The excise tax was key to consider, Stiff goes on, because "the majority of that money is allocated to the BEST program for more school construction." Hence, voters will presumably be interested in the amount of money Amendment 64 might generate for this cause, event though the question goes beyond the Legislative Council's mandate to calculate only how much the state would collect in sales tax revenues.
That wasn't the only difference between the state's findings and CCLP's. As Scanlon points out, "the Legislative Council assumes a higher per-ounce sale price after Amendment 64 is passed" -- a figure that would translate to more revenues that the study predicts.
And when it comes to state sales-tax revenues, the state's data is in the same ballpark as that put forward in the study, Stiffler notes. "They gave a range of $4 million to $22 million depending on different scenarios -- and our state sales-tax revenue was about $8.7 million."
In defending the study as a whole, Scanlon says, "a good portion of the work we do is state tax and fiscal-budget work. So it's important to us that public-policy discussions are informed by credible independent research." When the Drug Policy Alliance "reached out to us for help, we agreed because we believe decision-makers on public-policy matters, whether voters or legislators, are better served when they're informed with credible data. And our analysis is a similar approach to what the Legislative Council took, although we include more factors. And our numbers are not inflated.
"I think someone used the term 'rosy'" when it came to the study's predictions, Scanlon goes on. "But the Drug Policy Alliance didn't have any influence over the findings of this report, and we didn't produce numbers we thought would please the campaign or that would improve their chances this fall. We produced a report that we believe provides the public with independent, credible analysis about what Amendment 64 would mean on the revenue side."
Continue reading our previous coverage of the controversial Amendment 64 study.