Article Originally Appeared on The Gazette. Written by Conrad Swanson
Colorado Springs could raise more than $25 million next year by legalizing recreational marijuana sales, a new University of Denver study shows.
The findings, by DU economics professor Jack Strauss, come as Mayor John Suthers is pushing to put a stormwater fee program on the November ballot to raise $17 million a year. With stormwater costs covered, that new money would allow the city to beef up the police force and replace the city’s aging vehicle fleet.
Suthers’ views have put him at odds with the City Council majority, which would support putting recreational marijuana sales to a citywide vote. Not all of the council members are convinced by the study’s numbers, though.
Councilman Bill Murray said Strauss’ estimate likely is overly generous by up to $10 million.
But voters should decide, and they’re more likely to support recreational pot businesses than resurrecting the stormwater fee, Murray said.
For his study, Strauss said he examined the five largest Colorado cities where recreational marijuana can be sold – Denver, Fort Collins, Boulder, Aurora and Pueblo. He then adjusted for inflation to apply those sales to Colorado Springs. He also examined the state as a whole, again adjusting for inflation.
Colorado Springs received about $2.6 million from medical marijuana sales taxes and license fees last year, said Charae McDaniel, the city’s acting budget director.
Strauss said the city also would get more money from the state, new economic activity – creating 1,300 to 1,700 jobs – and licensing fees. Colorado applies a 15 percent special sales tax to each recreational marijuana sale, and the city where that sale is made receives 15 percent of that sales tax as an economic incentive.
Suthers said Strauss’ estimates are wildly optimistic and out of touch with the city’s license and tax structures.
“The notion that Colorado Springs should fund essential government services with proceeds from drug sales in violation of federal law is irresponsible,” Suthers said. “You don’t fund government on such an unreliable source.”
Said Strauss: “From an economic perspective, there is only an upside,” as recreational pot sales also would lure more tourists to town.
In Manitou Springs, where two shops have sold recreational pot since 2014, total sales tax revenue from all city businesses increased from $1.9 million in 2013 to $5.4 million last year, said city Financial Director Rebecca Davis. Because the city has fewer than three pot shops, it cannot divulge specific sales tax revenue from those outlets, Davis said.
For some, it’s not about the money.
And while the city could tax recreational marijuana more heavily, those rates would simply drive buyers to the city’s already substantial black market, he said.
Strand said he is concerned that legalizing recreational pot sales would “provide access at a much greater level” for school children and send them the message that “this is OK.” The Air Force retiree also expressed concern that increased access to marijuana could affect Colorado Springs’ relationship with the city’s five military bases.
But Michael Elliott, a spokesman for Citizens for Safer Neighborhoods, which commissioned Strauss’ study, said legalizing recreational marijuana in Colorado Springs would put a dent in the black market.
“Marijuana is legal for people to possess and consume in Colorado Springs already,” Elliott said. “Right now there’s just no legal ways for people in Colorado Springs to buy it from a Colorado Springs business. That is putting the business in the hands of the black market.
“It’s a question of whether it’s sold by a licensed, regulated and taxed business or by the criminal element.”
Elliott said his organization chose Strauss for the study because he’s familiar with marijuana issues in the state. He would not say how much Strauss was paid for the work.