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Colorado Uses Marijuana Revenue To Fund Programs

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The Colorado Legislature has designated tax funds from the state's marijuana sales to help pay for popular programs that were previously financed by settlements with the tobacco industry. Several lawmakers have voiced concern that the cannabis cash can only temporarily keep the programs afloat.

In 2017, the Colorado Legislature appropriated $10 million of the Marijuana Tax Cash Fund to help pay for five state programs. The programs include children's literacy, alcohol and drug abuse prevention, mental health services and public health agencies, The Denver Post reports.

Jagruti Shah, director of the Colorado Department of Human Services' Office of Behavioral Health, praised the marijuana tax money as critical in helping keep the lights on for key public initiatives.

"The Marijuana Tax Cash Fund is paying for vital community-based behavioral health treatment for individuals involved in the criminal justice system. ... In the last fiscal year, nearly 2,000 individuals received services through these programs," Shah said.

The five programs had been funded by tobacco manufacturers. In 1998, the Master Settlement Agreement mandated that the tobacco industry pay $10 billion annually to 46 states and five U.S. territories for causing smoking-related illnesses and misleading the public, according to the Public Health Law Center.

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Colorado was among the seven states who initiated the lawsuit that resulted in the MSA. Those states were given additional compensation by cigarette manufacturers for their legal work; Colorado received about $15 million annually, which it used to create popular public programs. However, the last of the additional payments came in April, according to The Denver Post.

Former Democratic state Sen. Pat Steadman of Colorado said that his legislature had taken the settlement funds for granted and did not plan ahead for when the compensation would gradually decrease.

"Everyone thought it was mad money, that it would go on in perpetuity, that it could fund everything," Steadman explained. "But we were seeing problems with the declining stream of tobacco revenue."

Currently, Colorado has a 15 percent special sales tax for cannabis sales; 71.85 percent of that revenue goes into the Marijuana Tax Cash Fund. Chris Stiffler of the Colorado Fiscal Institute warned that state lawmakers should not view the fund as a perpetual piggy bank.

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"A lot of people may think it's been a stop-gap funder," Stiffler said. "They all ask about the marijuana dollars as if they are the solver of all problems."

Steadman echoed this concern, adding that the legislature could not rely on marijuana sales generating consistent levels of revenue to help fund programs.

"The irony is now we're concerned the marijuana money might have peaked, and the legislature made lots of promises with that money ... I'm actually worried that what was a good idea for the marijuana cash is a source that might be unstable and unsustainable," Steadman concluded.

Currently, eight states have legalized recreational marijuana sales. They include Colorado, Alaska, California, Maine, Massachusetts, Oregon, Nevada and Washington, according to Governing.

Sources: The Denver Post, GoverningPublic Health Law Center / Featured Image: Pixabay / Embedded Images: Lindsay Fox/Flickr, Dank Depot/Flickr

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