As FOX 31's Eli Stokols reports:
Tax revenues from Colorado’s new recreational marijuana industry are pouring into state coffers — and that’s actually a bit of a problem for lawmakers…
According to a legal analysis conducted by the state and obtained by FOX31 Denver, the marijuana revenues are subject to the state’s Taxpayer Bill of Rights (TABOR), which will require lawmakers to take action if tax revenues from the new legal marijuana industry exceed the estimated $67 million in annual revenue that was anticipated in the 2013 Blue Book analysis of Proposition AA, the new sales and excise tax rates voters approved in November.
The legal memorandum from the Office of Legislative Legal Services was sent to members of the Joint Budget Committee Monday night…
The most current Dept. of Revenue estimate forecasts that the state will take in $107 million, exceeding the Blue Book estimate by some $40 million.
The conclusion: the state must lower the tax rate and either refund the excess amount of revenues above the $67 million estimate or refer a measure to the November 2014 or 2015 ballot seeking permission from voters to let the state keep and spend all of the tax revenue from recreational marijuana.
As news reports came in that the tax revenue being collected from the legal sale of marijuana in Colorado was greatly exceeding early estimates–something we predicted would be the case–the possibility that this new robust source of revenue might be subject to Taxpayer's Bill of Rights (TABOR) limits was in the back of our minds.
When defending TABOR, Republicans generally stick to the most popular provision of convicted felon Doug Bruce's labyrinthine 1992 constitutional "tax reform" measure: its requirement that affected citizens vote on tax increases. If that was truly all TABOR did, it would be harder for Democrats and good government-minded Republicans–some also part of a lawsuit seeking to overturn TABOR–to publicly oppose it, though the basic question of whether that disrupts the whole principle of small-r republican government remains. When you poll that one aspect of TABOR, naturally, it polls well.
But when you start getting under the hood–how tax increase elections are subject to stringent limits on timing and ballot question language, how TABOR stymies the ability of the state to plan in good times for bad times, how (as may be in this case) the state cannot even take advantage of a huge new revenue source twice approved by voters–it's not nearly as rosy a picture now, is it?