Posted:
08/26/2013 12:01:00 AM MDT
Updated:
08/26/2013 05:59:01 AM MDT
In a tight vote
last week, the Denver City Council defied Mayor Michael Hancock's
request to ask voters to approve a sales tax rate for retail marijuana
that begins at 5 percent.
The council, in a 7-6 vote, chose 3.5 percent, siding with Auditor Dennis Gallagher. The auditor sent each council member two letters within a few weeks of each other, pleading with them to pick 3.5 percent over 5 percent.
The council makes its final vote Monday but cannot change the ballot language because not enough time remains to get the measure onto November's ballot. In the same measure, however, voters will be asked to permit the council to change the rate at any time to as high as 15 percent.
"My goal was to buffer the city as much as we can to make sure we have the ability to respond," Hancock said. "I was at 5. But I am not disappointed. We laid out what we thought would be the best reason. But the City Council sees 3.5 percent as the best way to get a yes vote."
Chief financial officer Cary Kennedy said the 3.5 percent tax is expected to bring in $3.4 million a year to pay for regulation, enforcement and education around the new industry. At 5 percent, the tax would have brought in an estimated $4.8 million, she said.
Nevertheless, the conflict is pronounced because Hancock and Gallagher were on opposite sides of the issue.
It appears Gallagher won.
Hancock said he isn't upset about the council's decision to go with a 3.5 percent rate over 5 and doesn't think he lost to Gallagher.
"This was never me versus Dennis Gallagher," he said. "But his weighing in was absolutely unprecedented. Very unusual. But, I guess, at the end of the day he is a citizen of Denver and has every right to weigh in."
Gallagher, whose office lambasted the administration for shoddy regulation of the medical marijuana industry in a scathing audit, argued that anything more than 3.5 percent would be shot down at the polls, he said.
"In 12 years, I have gotten four letters from the auditor, and two of them are about this marijuana tax," Councilman Charlie Brown said. "What is going on?"
The council cannot change the rate now because the ballot must be set by the end of August and there isn't enough time on the council's schedule to hold two votes before then.
Councilman Chris Nevitt, who introduced the amendment to change the rate to 3.5 percent from 5, said he would like to see a zero percent tax rate.
"We're sending huge price signals and we don't know how people will react," Nevitt said.
"That strikes me as dumb. I am perfectly happy to pass a bill. But the thing is, I don't want to tax it at all until the marketplace settles."
No other industry has taxes to pay for social issues, he said.
"We are reinforcing the pariah vision of this industry," he said. "It will become a simple ordinary industry like any other in Colorado, just like brewing and distilling and bicycle manufacturing."
Brown, who chairs a committee working on the city's regulation on retail marijuana, said he was sickened to see the beginning rate cut to 3.5 percent.
"It's silly to think they won't vote for 5 percent," he said. "This isn't a food tax. It's a sin tax. Ninety percent of the people who vote for this won't buy the product.
"What I have been hearing is if we are going to have marijuana, at least we should tax it. I am extremely disappointed that we lowered the rate that could cost the city about $2 million a year."
Jeremy P. Meyer: 303-954-1367, jpmeyer@denverpost.com or twitter.com/jpmeyerdpost
Leave a comment if you want to voice your opinion. This news is brought to you by Online Tax Pros, your source for filing your online taxes. I hope the government gets wise and taxes marijuana so we can build up our economy. The war on drugs isn't working, and we are spending too much trying to ban pot.
The council, in a 7-6 vote, chose 3.5 percent, siding with Auditor Dennis Gallagher. The auditor sent each council member two letters within a few weeks of each other, pleading with them to pick 3.5 percent over 5 percent.
The council makes its final vote Monday but cannot change the ballot language because not enough time remains to get the measure onto November's ballot. In the same measure, however, voters will be asked to permit the council to change the rate at any time to as high as 15 percent.
"My goal was to buffer the city as much as we can to make sure we have the ability to respond," Hancock said. "I was at 5. But I am not disappointed. We laid out what we thought would be the best reason. But the City Council sees 3.5 percent as the best way to get a yes vote."
Chief financial officer Cary Kennedy said the 3.5 percent tax is expected to bring in $3.4 million a year to pay for regulation, enforcement and education around the new industry. At 5 percent, the tax would have brought in an estimated $4.8 million, she said.
Nevertheless, the conflict is pronounced because Hancock and Gallagher were on opposite sides of the issue.
It appears Gallagher won.
Hancock said he isn't upset about the council's decision to go with a 3.5 percent rate over 5 and doesn't think he lost to Gallagher.
"This was never me versus Dennis Gallagher," he said. "But his weighing in was absolutely unprecedented. Very unusual. But, I guess, at the end of the day he is a citizen of Denver and has every right to weigh in."
Gallagher, whose office lambasted the administration for shoddy regulation of the medical marijuana industry in a scathing audit, argued that anything more than 3.5 percent would be shot down at the polls, he said.
"In 12 years, I have gotten four letters from the auditor, and two of them are about this marijuana tax," Councilman Charlie Brown said. "What is going on?"
The council cannot change the rate now because the ballot must be set by the end of August and there isn't enough time on the council's schedule to hold two votes before then.
Councilman Chris Nevitt, who introduced the amendment to change the rate to 3.5 percent from 5, said he would like to see a zero percent tax rate.
"We're sending huge price signals and we don't know how people will react," Nevitt said.
"That strikes me as dumb. I am perfectly happy to pass a bill. But the thing is, I don't want to tax it at all until the marketplace settles."
No other industry has taxes to pay for social issues, he said.
"We are reinforcing the pariah vision of this industry," he said. "It will become a simple ordinary industry like any other in Colorado, just like brewing and distilling and bicycle manufacturing."
Brown, who chairs a committee working on the city's regulation on retail marijuana, said he was sickened to see the beginning rate cut to 3.5 percent.
"It's silly to think they won't vote for 5 percent," he said. "This isn't a food tax. It's a sin tax. Ninety percent of the people who vote for this won't buy the product.
"What I have been hearing is if we are going to have marijuana, at least we should tax it. I am extremely disappointed that we lowered the rate that could cost the city about $2 million a year."
Jeremy P. Meyer: 303-954-1367, jpmeyer@denverpost.com or twitter.com/jpmeyerdpost
Leave a comment if you want to voice your opinion. This news is brought to you by Online Tax Pros, your source for filing your online taxes. I hope the government gets wise and taxes marijuana so we can build up our economy. The war on drugs isn't working, and we are spending too much trying to ban pot.
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