Weed MoneyDENVER — Colorado was the first state to legalize recreational use of marijuana with a vote in 2012, and the state Treasury is now seeing the dividends from that historic decision. While fear mongers who predicted crime waves that simply never happened continue to try to manufacture reasons not to allow people to exert their own free will, financial experts are now predicting that tax payers are about to get their first marijuana tax refund from the government because of a legal limit on the amount of revenue the legislature is allowed to collect from legal cannabis consumption.

Originally thought of as a legislative “experiment”, the tax on legal recreational cannabis is intended to raise revenue the school system and other fundamental governmental expenses, but the state constitution includes a firm limit on how much tax money the state of Colorado can collect before it has to give some back to residents. So far the state has already account for more than 50 Million Dollars in tax money direct attributable to the legal purchase of recreational weed. That means Coloradans may each get their own cut of the $50 million in recreational pot taxes collected in the first year of legal weed.

The constitutional provision is a tax limitation from the voter-approved constitutional amendment titled the Taxpayers’ Bill of Rights which was enacted in 1992 and requires Colorado to release funds back to taxpayers if the state collects more than what is permitted by a simple formula based on demographics like population growth and simple mathematical metrics like inflation. Colorado has already issued refunds six times in the past, totaling more than $3.3 billion in disbursements back to state residents… but none of that money came from marijuana sales.

Republicans and Democrats are working together for a change, trying to find a way to avoid reimbursing residents with marijuana money and it may result in a new ballot initiative asking Colorado residents to allow pot taxes to be excluded from the constitutional provision for refunded taxes. Republicans are in a strange position because they are usually staunchly against tax increases and vote unanimously to refund taxes for just about any other reason – so they are claiming that ‘marijuana should pay for itself’ and that general tax revenue should be accounted for separately so it is not accidentally used to pay for things like addiction education programs and police officer training for weed relevant work like identifying people driving under the influence. “I think it’s appropriate that we keep the money for marijuana that the voters said that we should,” said Republican Senate President Bill Cadman. “This is a little bit of a different animal. There’s a struggle on this one,” said Sen. Kevin Grantham, one of the Republican budget writers.

It’s odd that suddenly money is no longer fungible in the minds of many legislators when they think they can get away with grabbing a few more dollars from tax payer pockets under the auspices of funding things separately. “I don’t recall anyone saying that stadium should fund itself with it’s own tax base when they take money from residents to build arenas I would never go to… why is my marijuana any different?” said one state resident who asked to remain anonymous.

After legalizing marijuana in 2012, Colorado voters also approved a 15% tax on pot in 2013 for schools and another 10% sales tax for lawmakers to spend. At the time, politicians said that the two taxes would generate about $70 million in revenue over the the first year. The state now believes it will earn closer to $50 million, but as the economy improves and the overall tax base continues to expand, Colorado is now obligated to give back some of that money. Current predictions in the Governor’s budget suggest pot refunds could result in $30.5 million dollars being distributed, which works out to about $7.63 per adult resident.

“It’s just absurd,” said Democratic state Sen. Pat Steadman, who happens to be one of the Legislature’s budget writers. Meanwhile several marijuana industry groups actively supported pot taxes as a way of gaining favor with centrist residents, but now they aren’t taking any position on how to handle the tax overages. The issue of legal weed tax refunds will be part of a final decision along with other refunds totaling $135+ million in March of 2015.

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