Government

PA Auditor General: State Could Collect $581 Million In Taxes Yearly By Legalizing Pot


The Pennsylvania Capitol in Harrisburg lit to celebrate the passing of medical marijuana legislation in 2016.
Credit: PA Internet News Service

Pennsylvania’s auditor general is confident that he has a proposal that will make the state’s bruising budget battles a thing of the past and allow the funding of a whole host of worthwhile programs.

The simple solution, he says, is to legalize pot and collect $581 million a year in taxes from it.

Eugene DePasquale, who as auditor general is charged with ensuring that tax dollars are spent properly across a whole host of government functions, has been advocating for some time for the legalization of marijuana for recreational use in the state. The state has had a medical marijuana law since 2016, but those who do not have one of the qualifying conditions for entry into that program can still be subject to criminal penalties.

In a report issued by his office and at a joint news conference with Pittsburgh Mayor Bill Peduto on Thursday, DePasquale laid out a case for the revenue implications of marijuana legalization. Working off a survey that says 8.38 percent of Pennsylvania adults already admit to using marijuana on a monthly basis, he estimates that there are, conservatively, 800,000 individuals using the drug in the state today.

“For guidance in determining how much the average user might spend each year, we turned to Colorado and Washington,” DePasquale said during the news conference. “Both states legalized marijuana in 2012, and have historical data to pull from. In those states, the average user spends $2,080 per year on marijuana. … If we assumed Pennsylvania users would spend the same amount per person as Colorado and Washington, that means that the legal industry in Pennsylvania would be $1.66 billion.”

DePasquale then assumed a tax rate of 35 percent to arrive at the $581 million revenue number.

“Let that number sink in – $581 million, conservatively, without a broad-based tax increase on any single Pennsylvanian,” he said. “Just imagine what good we could do with that in Pennsylvania.”

He argued that neighboring New Jersey may soon be moving toward full legalization, and that with efforts underway in other nearby states such as Delaware, Maryland, Ohio and West Virginia, the Legislature should act soon to make sure that Pennsylvania doesn’t fall behind in the Northeast.

“Even President Trump has said that the states should be able to decide this on their own,” he said. “Now’s the time for Pennsylvania to stop imagining how it could benefit from regulating and taxing marijuana and to begin realizing those benefits.”

Peduto said that over the course of the past five years, his perspective had changed from merely decriminalizing marijuana to favoring full legalization and regulation.

DePasquale cited a number of programs that he would like to see funded with the proceeds of taxing recreational marijuana. He proposed funding more pre-K programs, devoting more money to the child welfare system and improving veterans care.

Another of his top priorities was expanding the Children’s Health Insurance Program.

“[CHIP] is already remarkably successful, providing health care coverage for 180,000 children,” he said. “For every $10 million in new funding, about 5,000 more children can receive healthcare coverage.”

DePasquale was asked to address the potential health risks the state might see if marijuana were to become fully legal. He largely dismissed this concern, stating that because the drug is already being used on a large scale, any health care costs have already been built into the state’s economic picture.

“I am not suggesting that this is something that has no drawback,” he said. “The reason why this is a weighted public policy issue is that there are pros and cons to it, right? I mean, if it was all pro and no con, it probably would have been decided decades ago.”

DePasquale’s report cites a 2017 Franklin & Marshall College poll that shows 56 percent of Pennsylvania voters supporting the legalization of marijuana, the first time the F&M poll has shown majority support in the state.


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Pennsylvania Watchdog

Pennsylvania Watchdog