In advocating “pot for potholes,” recreational marijuana proponents promised a potent new revenue source for tackling a familiar urban headache.
But in Manitou Springs, the only Pikes Peak region community so far to permit recreational pot shops, the cash infusion has meant more than road repairs.
Just more than two years after Manitou opened the first of its two retail pot stores, community leaders credit a booming pot trade for driving a resurgence in the city’s finances. The tax money has helped double Manitou’s general fund after back-to-back natural disasters, bankrolled long-hoped-for improvements in its gritty eastern corridor and eased the financial path toward preparing for future disasters.
“That all came about because of marijuana,” said Marcy Morrison, a longtime Manitou resident and veteran policymaker who co-founded the city’s Urban Renewal Authority. The agency has seen its budget rise from an average of $34,000 per year in the four years before legalization to $1.2 million in 2016 thanks to pot tax collections, paving the way for a series of planned improvements.
Morrison was a vocal opponent of legalizing recreational marijuana sales in Manitou, fearing the health effects on young users and what legal pot would mean for the community’s reputation. Nearly three years later, she remains committed to keeping pot out of children’s hands but credits marijuana revenues with breathing new life into urban revitalization efforts.
The windfall offers a taste of what the city of Colorado Springs left on the table in July 2014, when city leaders exercised an opt-out provision and voted to ban recreational marijuana stores.
A much better guide might be found in Denver, where tax revenues offset the expense for pot enforcement while helping to fund a variety of city services.
In 2016, a year in which the marijuana industry in Colorado took in about $1.3 billion in sales statewide, the city of Denver raked in $20.6 million in municipal tax revenues on recreational sales alone, city figures show — nearly double the $10.6 million collected after Denver’s recreational pot stores opened in 2014.
Recreational pot stores in Denver are subject to a 7.15 percent city sales tax — or the city’s standard sales tax of 3.65 percent plus a special tax of 3.5 percent.
In addition to Denver’s municipal tax revenues, the city’s share of state tax revenue in 2016 reached an additional $4.4 million, according to the figures, provided by Denver city spokesman Daniel Rowland.
Tale of two cities
While Colorado’s second-largest city has struggled to stay on top of crumbling infrastructure — it faces an Environmental Protection Agency lawsuit for failing to adequately address stormwater runoff, for example — Manitou Springs has leveraged its pot sales tax collections to make sweeping investments in infrastructure.
In 2017, the town plans to spend $7.6 million in storm drainage upgrades — compared with $206,000 in 2013.
Much of the increase is due to federal grant relief that likely wouldn’t have been realized without pot-related spending power, said Rebecca Davis, Manitou’s director of finance.
“All these grants require grant matches,” Davis said. “If we didn’t have all of this extra income coming in, then we wouldn’t have the money for the matches.”
Marijuana, Davis added, has “really been beneficial to the city in terms of our infrastructure requirements.”
Meanwhile, general fund operations have doubled in the past five years, from about $4.9 million in 2013 to a planned $10.1 million in 2017, the town budget shows.
Original article via TheGazette