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Published on March 2nd, 2014 | by Len Lazarick

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Marijuana legislation could save millions or cost taxpayers more

By Margaret Sessa-Hawkins

Margaret@MarylandReporter.com

Marinuana joint by Torben Bjorn Hansen on Flickr Creative Commons

Marinuana joint by Torben Bjorn Hansen on Flickr Creative Commons

Two bills aiming to decriminalize or legalize marijuana heard in a Senate committee last week could potentially bring in millions in new revenue for the state, or could wind up costing taxpayers more than ever.

Proponents of the bills point to possible savings on jail time, courts and police, not to mention extra income from taxes on what is now illegal.

To get at these potential savings and earnings though, Maryland taxpayers will have to shell out $8 million on implementation.

Even if the bills do not wind up being the pay-dirt some are envisioning, however, sponsors still say the funds would be well worth spending to keep people from having their lives ruined by arrest and incarceration for a minor crime.

What doesn’t work

“What we’re doing now doesn’t work,” Sen. Allan Kittleman, R-Carroll-Howard, said of existing laws. “It’s as simple as this. It doesn’t work, and we need to do something.”

UPDATED 3/2, 8:30 p.m. Kittleman is co-sponsor of SB364 with Sen. Bobby Zirkin, D – Baltimore County, to make possessing marijuana a civil offense subject to a $100 fine like a speeding ticket. Similar legislation passed the Senate last year but did not get out of committee in the House.

Marijuana has been decriminalized in these states, according to this chart from NORMAL (National Organization for the Reform of Marijuana Laws)

Marijuana has been decriminalized in these states, according to this chart from NORMAL (National Organization for the Reform of Marijuana Laws)

Implementation of the measure would have a one-time cost of $112,600 and the state would lose some money from lowering fines for possession of less than 10 grams from $500 to $100.

Following these initial expenditures, the state would save money on enforcement going forward. CORRECTED 3/2, 8:30 p.m. Sixteen eleven states so far have decriminalized marijuana, and 11 states that studied the effect saw savings in law enforcement and court costs, which were, in most cases, diverted to pursuing and prosecuting cases of more serious drug trade.

“If you’ve ever been in the district court before then you’ve seen rows of police officers sitting there,” Zirkin said. “They’re subpoenaed to court, they have to be there, everyone in the chain of custody will be there for what essentially will be a PBJ  [probation before judgement] or a stet [inactive docket] or a nolle-pros [dropping criminal charges]. And they sit there for hours upon hours, not out on the street, not dealing with crime.”

Legalization brings in dollars

The much broader measure legalizing pot, SB658, sponsored by 10 senators led by Sen. Jamie Raskin, D- Montgomery, would have considerably more far reaching consequences for the state’s finances. For starters, the net expenditure for implementing the bill comes in at $8 million, spread over five years.

Sen. Jamie Raskin

Sen. Jamie Raskin

As steep as the cost of the bill would be, however, the projected revenue from the legalization of marijuana could cover its total cost almost 10 times over within the first year.

Precise revenue estimates are difficult because marijuana is a controlled substance, but the fiscal note on the bill predicts revenue from taxes would be around $71 million in the first year. Further estimates call for revenues of up to $95 million in subsequent years.

“We will be able to make a lot of money in revenue,” Raskin said. “Someone said to me today, ‘Well look at Colorado, they’ve already sold tens of millions of dollars of marijuana.’ I said that’s right, that’s tens of millions of dollars that won’t go into the coffers of drug dealers and organized crime in that state. They will be able to tax it and that money will be put back into public health and public education.”

Colorado, Washington state will report revenues

Colorado, which began commercially selling marijuana in January, had its first tax day on Feb. 20.  In initial predictions Colorado had estimated its earning from taxes would be around $40 million. Now, the state is placing the figure at closer to $100 million.

Del. Curt Anderson

Del. Curt Anderson

Many skeptics, including a few economists, say these numbers are too optimistic, and don’t take into account increased costs of enforcement and regulation. Law enforcement officers say the move will lead to increased cases of driving accidents caused by marijuana use, but how much is in dispute.

When revenue numbers do come in for Colorado, and for Washington state, which begins selling commercial marijuana in June, that information will impact the debate in states like Maryland considering legalizing the drug.

For many lawmakers, however, it will be human factors which lead them to decide whether or not to support the bills, not financial.

Del. Curt Anderson, D-Baltimore, is the lead sponsor of legalization in the House, HB880, along with 31 co-sponsors. The same bill which failed last year had only four co-sponsors.

“The reason I sponsored these bills is that there is an overwhelming number of African American males being arrested in the state of Maryland and being convicted and getting criminal records for simple possession of marijuana,” Anderson said. “You get a criminal record you can’t get a job, you can’t get into some schools, can’t get a loan, in some cases you can’t get into housing. That’s just unfair.”

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  • Brion Eduardo

    Kudos to Margaret Sessa-Hawkins for a neutral, fact-based article on a subject which has traditionally been biased in favor of prohibition. I also like the fact that she corrected an earlier mistake. Too many media organizations refuse to even acknowledge errors, much less correct them.

    As for the costs/benefit analysis, a thorough examination would have to include the economic growth of a new, legal industry in terms of job creation and the recirculation of earnings through the economy vs. the loss of revenue within the established black market.

    • Brian Kelly B Bizzle

      For some reason I’m apparently being blocked from posting a comment of my own, So, I’ll try adding it as a reply. If I have two identical posts later its only because they didn’t allow this comment the first time:

      The prohibition of marijuana costs the taxpayers billions upon billions of dollars annually. Legalizing marijuana not only saves us those billions of dollars spent each year but also generates us hundreds of millions of dollars a year in taxes.

      I think it’s a no brainer. Clearly, legalizing will both save us tons of money and generate tons of money in tax revenue.

      “In Colorado, Marijuana Legalization leads to $100 Million in Revenue

      “Colorado is anticipating $100 million in cannabis tax revenue. Within the first month of retail sales, businesses reported $1.24 million in tax revenue alone, and lines in front of dispensaries were out the door all over the state.”

  • Brian Kelly B Bizzle

    The prohibition of marijuana costs the taxpayers billions upon billions of dollars annually. Legalizing marijuana not only saves us those billions of dollars spent each year but also generates us hundreds of millions of dollars a year in taxes.

    I think it’s a no brainer. Clearly, legalizing will both save us tons of money and generate tons of money in tax revenue.

    “In Colorado, Marijuana Legalization leads to $100 Million in Revenue

    “Colorado is anticipating $100 million in cannabis tax revenue. Within the first month of retail sales, businesses reported $1.24 million in tax revenue alone, and lines in front of dispensaries were out the door all over the state.”

    http://www.travelerstoday.com/articles/8785/20140214/in-colorado-marijuana-legalization-leads-to-100-million-in-revenue.htm

    Legalize Nationwide!

  • ED Moore

    Come on… It’s a darn good investment with very high R.O.I.!

  • abby_adams

    OK, so we reduce the # of those “totally stigmatized” & then start talking legalization at what cost to society? Let me get this straight, Gov “Moonbeam” goes on the Sunday talk shows & openly questions the so called “positive” effects on society of “recreational” pot use & these august legislators are jumping on the legalization bandwagon? It wouldn’t have anything to do with the windfall of tax revenues now would it? More $$ for them to waste?
    Is this how low we have sunk? Anything goes as long as the state can tax & make $$ from it? So what’s next, do we start pushing other drugs for profit? Why not “Bunny Ranch” franchises all over the state? That would save us money in policing & the courts plus we’d break Nevada’s monopoly & make even more revenue. Make no mistake it’s a slippery slope that is loaded with those pesky “unintended consequences” that I hope some in Annapolis will consider before making Maryland just another pot head heaven!

  • Dale McNamee

    Just what we need, more “disconnected” citizens ! I’ve been around, and have worked with, people who were “stoned” from 6:30am to 5:00pm…Every break time became a time to “get high” and there were other drugs used, bennies, acid, etc. Even after work, they were to spend their evenings “stoned” and “hammered” drunk… How enjoyable,fun, and recreational… And many of these guys had wives and children…

    I consider people who have to get high or drunk “losers” since they can’t “handle life”… I don’t even drink because of the damage that alcohol did to my family…

    And Maryland citizens will sell their souls for tax revenue…

    Even if there are more auto accidents and dangerous driving… There’s enough with DUI/DWI, prescription/OTC medicated drivers and we want more ? Not to mention increased costs of treatment and the destructive effects on wives,children,relatives, and friends…
    Then, there are economic effects…

    Then, how does one dissuade teens from smoking pot if it’s OK for adults ?

    Marijuana should be taxed as heavily as tobacco…

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