Legalizing marijuana could raise $40 million for Arizona schools, backers say

Legalizing and taxing marijuana could raise an additional $40 million a year for education, according to estimates by the campaign to legalize the drug in Arizona.

The Campaign to Regulate Marijuana Like Alcohol, which is gathering signatures to qualify for the 2016 ballot, would establish a network of licensed cannabis shops where sales of the drug would be taxed.

J.P. Holyoak, campaign chairman, said at a news conference at the state Capitol, “We have a choice: We can either tax and regulate marijuana for the benefit of education and public health care, or we can keep it illegal for the benefit of illegal drug cartels.”

He called the group’s $40 million estimate “very conservative.”

Total spending on K-12 education in Arizona totals about $10 billion, including state, federal and other sources.

Under the Regulation and Taxation of Marijuana Act, adults 21 and older could possess up to 1 ounce of marijuana and grow up to six plants in their homes without obtaining licenses, as long as the plants were in a secure area. The initiative also would create a distribution system similar to Colorado’s, where licensed businesses produce and sell marijuana, and pay a 15 percent tax on retail sales to be allocated to education, including full-day kindergarten, and public health.

Half of the money generated for education under the Arizona initiative would fund K-12 school operations and maintenance, and the other half would fund all-day kindergarten.

The prospect of new education funding is a key part of the pitch to legalize the drug. Arizona’s poor education standing has been the focus of intense debate among state leaders as well as educators, many who say they have inadequate resources. In fiscal 2013, Arizona spent $7,208 per student in fiscal 2013, far below the national average of $10,700, a recently-released U.S. Bureau report said.

There is no independent analysis of how much tax revenue could be generated under the proposed law.

The Joint Budget and Legislative Committee staff won’t conduct a fiscal analysis until its sure the initiative qualifies for the ballot. Michael Bradley, chief of staff for schools superintendent Diane Douglas, said Tuesday the Department of Education has not looked at the issue, but would do so in response to The Republic’s inquiry.

Bruce Merrill, a longtime Arizona pollster, said “there’s no question” voters would support new funding for education, saying it’s the top issue on voters’ minds.

“In terms of public opinion, will there be a positive response in reaction to new taxes bringing in money for education? I don’t think there’s any question,” Merrill said. “People will respond favorably. But ... will they know what that means, or the implications beyond that? It gets very complex after that.”

Merrill pointed to problems in Colorado, which is in its second year of legalized marijuana. There, tax revenue has fallen short of projections.

In 2014, Colorado’s first year, the state collected about $87.3 million in taxes, licenses and fees, Colorado Department of Revenue records show. Colorado gives the first $40 million raised by its marijuana tax to public school construction. About $13.3 million was collected last year for the schools.

Separately, two neighboring states and sheriffs have sued to strike down Colorado’s law, and neighbors of grow houses are complaining of the strong, dank odor wafting from the buildings.

Seth Leibsohn, chairman of Arizonans for Responsible Drug Policy, which opposes legalization, said the harms of marijuana legalization would outweigh new funding for schools. He said legalization would jeopardize educational outcomes and could create “social, educational and health damage that would outweigh all of the potential collected revenue.”

“Given the costs of treatment, addiction, suspensions, expulsions, drop-outs, accidents, hospitalizations, I would submit a bill to the state for hundreds of millions of dollars with their check,” Leibsohn said, referring to the jumbo-sized $40 million check the campaign symbolically presented to the state.

Leibsohn later added, “The dangers of such an upsurge ought to dominate decisions about the level and form of taxation.”

The Arizona Chamber of Commerce, business leaders and Gov. Doug Ducey oppose legalization. Robert Graham, chairman of the state Republican Party called the campaign’s news conference “pathetic” and said the promised benefits of legalization “are as fake as the check they showed at their press conference today.”

On Wednesday, legalization supporters — some of whom identified themselves as medical-marijuana users — said many people use marijuana even though it is illegal and the state might as well benefit financially from it rather than “cartels.”

Lisa Olson, a teacher and medical-marijuana user, said she supports the legalization because of the “continued degradation” of Arizona schools.

“I’m in the trenches every day and I have seen what the lack of funding is doing to our schools and to our children’s future,” she said. “So our class sizes are increasing, we’re all aware that we have a teacher shortage. We need every dollar we can get for education.”

The campaign said it had collected more than 60,000 of the more than 150,000 valid signatures of registered Arizona voters to qualify for the November 2016 ballot.

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