How much revenue would Michigan Proposal 1’s marijuana legalization generate for the state? Estimates range from $129.4 million to $287.9 million
Michigan Proposal 1 would allow adults aged 21 years or older to possess and use marijuana for recreational purposes. The measure would create an excise sales tax of 10 percent, which would be levied on marijuana sales at retailers. Revenue from the tax would be allocated to local governments, K-12 education, and road and bridge maintenance. Estimates of the tax revenue that Proposal 1 would generate have varied from $129.4 million to $287.9 million.
Earlier in 2018, the Coalition to Regulate Marijuana Like Alcohol, the PAC behind Proposal 1, said legalization would generate about $200 million in tax revenue for Michigan. The coalition hired VS Strategies to estimate how much tax revenue the state would generate, and the estimate was released on October 1. VS Strategies estimated that Proposal 1 would generate $129.4 million in 2024 and thereafter. Scott Greenlee, president of the opposition PAC Healthy and Productive Michigan, responded to the analysis, saying, “What went wrong? The report is very clear: the numbers do not match their promises.”
On Monday, the Michigan Senate Fiscal Agency released a fiscal analysis of Proposal 1. While VS Strategies’ estimate was $71 million under the coalition’s original expectation, the Senate Fiscal Agency’s estimate was $88 million above the coalition’s original expectation. The Senate Fiscal Agency reported that $287.9 million in tax revenue would be generated from legalization in 2023.
Josh Hovey, spokesperson of the Coalition to Regulate Marijuana Like Alcohol, responded, "Whether you take our conservative estimate or the state's more bullish estimate, the key thing is that Proposal 1 will help the state collect significant and much-needed tax revenue to help fund roads, schools and local communities.” Greenlee also responded, “We're talking about a tiny half a drop in the bucket for the state budget. I know a lot of people are looking at this. It shows further ambiguity of what is actually going to happen.”
If approved, Michigan would be the 10th state to legalize recreational marijuana. An additional 29 states have legalized medical marijuana. Besides Michigan, three states are also voting on ballot measures related to marijuana in November 2018.
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