An unlikely pair of elected officials teamed up Monday to make a public call to funnel more marijuana tax monies to education in Nevada.
State Sen. Tick Segerblom, considered the godfather of pot in Nevada, and Las Vegas City Councilwoman Lois Tarkanian, who was no fan of the proposal to legalize marijuana, said during a press conference Monday that money generated by Nevada marijuana sales should be pulled out of the state’s rainy day fund and sent directly to school districts.
“We want to make sure it goes towards education,” Tarkanian said. “If this goes into the rainy day fund, it’s sometimes a dark cellar in there, and we don’t know where it goes.”
Segerblom, who is running for Clark County Commission, said he has gotten one question more than any other on the campaign trail: Why isn’t the marijuana money that was promised in Question 2, the ballot measure voters approved in 2016 that legalized recreational marijuana in Nevada, going to education?
“Question 2 passed because were told marijuana money would go to schools,” Segerblom said.
The money Tarkanian and Segerblom were talking about is the special 10 percent sales tax tacked onto all recreational marijuana purchases made at dispensaries in Nevada.
The state projected the special sales tax to generate $13.6 million over the first seven months of legal recreational marijuana sales and $62 million over the first two years of sales (recreational sales started July 1).
But the actual numbers have far exceeded initial expectations, generating nearly $23 million in that time frame, and on track to bring in some $76 million or more for the state. Segerblom said that money could go a long ways towards helping the Clark County School District make up its $60 million budget deficit.
“Enough is enough — $75 million is coming in. Lets take that money and give it to schools,” Segerblom said.
Where is pot money?
Marijuana is taxed on two levels: 15 percent on the wholesale at the cultivation level (this fee is often passed on to consumers in the final sales price) and 10 percent on the sale of recreational marijuana.
The revenue from the wholesale tax first goes to pay for the state and local costs of regulating the industry, and the rest of that goes to the state’s public education fund. That wholesale tax has generated just over $13 million in the first seven months of recreational sales.
But Tarkanian said during the press conference that the city of Las Vegas has received “not one penny” from the state to pay for its regulatory costs.
The 10 percent retail tax has generated $22.8 million. But all of that money has gone to the state’s rainy day fund — a decision borne out of tense politicking towards the end of the 2017 Legislature.
Gov. Brian Sandoval’s budget initially estimated that the tax would generated about $63.5 million over the first two years of sales, and that money was earmarked for the state’s public education fund, called the Distributive School Account. But in the final days of the session, Republicans blocked that tax from passing — which would have left a hole in the state’s budget — as they tried to force Democrats to fund the Education Savings Account, a controversial private school voucher program. Democrats instead pulled the money from the ESA fund to fill the budget gap and sent the marijuana tax money to the rainy day fund.
But Segerblom said that with the industry generating significantly more than expected, it’s time to look at pulling the marijuana money out of the rainy day fund and said he thinks the best way to do that would be for the governor to call a special session.
Segerblom noted the special sessions that Sandoval called in recent years: in 2014, a special session was called in which lawmakers passed $1.3 billion in tax breaks for electric car company Tesla, and in the 2016 special session they passed a tax increase to provide a $750 million subsidy to help pay for the new Las Vegas Raiders stadium.
“If you can do $1.3 billion for Tesla and $750 million for the Raiders, you can certainly do $75 million for education,” Segerblom said.
Special sessions can be called in one of two ways in Nevada: by the governor, or by a petition signed by two-thirds of the state legisalture (both Assembly and Senate).
Sandoval isn’t ready to call a session for the issue, his office said Monday.
“The Governor believes a special session is unnecessary as this is a policy discussion for the next session of the Legislature,” Sandoval’s spokeswoman Mary-Sarah Kinner said in a statement.