In 2019, Colorado’s Joint Budget Committee had had enough.
Marijuana taxes were being tapped to pay for too many things, lawmakers said. And it was time for the legislature to impose some discipline on how those dollars were spent.
“Right now, it just kind of is a piggy bank that folks look to when they want something funded,” then-Sen. Dominick Moreno, the former Joint Budget Committee chair, told The Colorado Sun at the time. “It has become a pool of money that you can just raid.”
Seven years later — even after multiple rounds of cuts — the Marijuana Tax Cash Fund feels as sprawling as ever, paying for more than 50 programs across a dozen departments. And the JBC’s exasperation level may have reached an all-time high.
“Nothing paid for by the Marijuana Tax Cash Fund makes sense,” JBC chair Sen. Jeff Bridges complained at one hearing in March.
“Some of it does,” he conceded a moment later, “but a lot of it doesn’t make any sense.”
As of last year, marijuana tax collections had declined about 41% from their pandemic peak, falling to $252 million from $424 million three years earlier. Of that, a little over half winds up in the marijuana cash fund, where it can be spent on 17 categories of services, including education, public health, law enforcement and housing. Most of what’s left gets distributed to K-12 schools and local governments.
The state’s revenue expectations were revised downward again in March. This fiscal year, the Office of State Planning and Budgeting anticipates $242 million in marijuana tax collections. Next budget year, which starts July 1, revenue is expected to fall again to $238 million.
Legislative budget analysts say they aren’t entirely sure why revenue keeps falling. But they suspect it’s a combination of rising competition from other legalizing states, and black market drugs like intoxicating hemp, whose proliferation has been blamed for cannibalizing legal marijuana sales across the country.
The latest forecasts triggered another round of last-minute cuts to marijuana-funded programs. As a result, Bridges, a Greenwood Village Democrat, is calling for a line-by-line review of the fund this summer and fall — part of a long list of state expenses the JBC plans to put under the microscope after this year’s budget cuts.
The budget panel cut $16 million from marijuana-funded programs, including substance abuse prevention, anti-bullying grants and cannabis research. They also eliminated a $20 million payment to BEST, the state’s public school construction grant program — marking the second year in a row lawmakers have cut it to balance the budget.
Rep. Rick Taggart, a Grand Junction Republican, wanted to go even further, calling out a series of line items for potential cuts.
“I don’t know what concurrent enrollment has to do with marijuana,” Taggart said at a hearing in March. “I don’t know what trial court programs have to do with marijuana. I definitely don’t know what consumer protection and antitrust have to do with marijuana.”
Most of the cuts on Taggart’s list proved a bridge too far for JBC Democrats, who said that even if certain programs didn’t have a logical connection to marijuana, they all provided public services of some value.
Further complicating matters, many of the programs that don’t sound like they have anything to do with marijuana actually are related to the drug’s legalization. The consumer protection funding, for instance, was approved in 2022 through Senate Bill 205 — legislation aimed at cracking down on intoxicating hemp.
Nonetheless, some allowable spending categories — like rental housing assistance and police training academies — have no clear link to marijuana.
In 2019, the JBC wanted to restrict marijuana tax dollars to two areas: education and the opioid crisis. Since then, opioids have faded as a political priority at the state Capitol. But lawmakers remain interested in new restrictions around marijuana spending.
“There will be a conversation about (the Marijuana Tax Cash Fund) this interim,” Bridges said in March. “We are going to dig through this, look at what’s funded (and) perhaps think of a different approach to MTCF generally.”
In the meantime, budget writers decided they had to stop the bleeding however they could. For the first time since voters legalized recreational use of marijuana in 2012, the JBC is proposing cutting in half the 10% share that local governments receive from state sales taxes on marijuana in their jurisdictions.
If passed into law by the full legislature, the state would receive an extra $9.4 million next year at local governments’ expense.
The budget proposal is being debated in the state Senate this week, after which it moves to the House for consideration.
Type of Story: News
Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.
“}]] As of last year, marijuana tax collections had declined about 41% from their pandemic peak, falling to $252 million from $424 million. Now state budget writers are calling for a line-by-line review of the Marijuana Tax Cash Fund. Read More
