By ERIC A. HOWALD
Of the Keizertimes
The City of Keizer has received its first share of taxes on recreational marijuana sales, but it’s not going to be the boon some people might have hoped for.
“This is not a game-changing event for us. It will help offset the increases in health insurance and PERS (Public Employees Retirement System) payments, but it’s not going to solve any of those issues,” said Tim Wood, Keizer’s finance director.
In the second quarter of 2017, the city took in $9,736.79 in local taxes. In the third quarter, Keizer sales amounted to $12,917.43 in local taxes. The city also receives a share of the state taxes collected on recreational pot and that totaled to $110,361.65. The share of the state tax actually covered 18 months of sales, from January 2016 to June of 2017, which means the amount will likely drop moving forward.
“It will probably be closer to $65,000 in the coming years,” Wood said.
The amount Keizer receives from the state taxes is based on population. The lion’s share of the state tax, 40 percent, goes into the state school fund, another 20 percent goes into mental health, alcoholism and drug services, 15 percent is dedicated to the Oregon State Police and 5 percent is used for drug treatment and prevention programs through the Oregon Health Authority. The state has collected almost $85 million in weed taxes since the beginning of the year.
Prior to the start of the 2017-18 fiscal year, Wood projected the city would collect about $180,000. Now that some hard numbers are available, he expects it to be somewhere in the range of $165,000 to $170,000.
“I looked at the Colorado and Washington history and made an estimate regarding annual sales and took 3 percent of that number,” Wood said.
The state collects the Keizer tax in addition to the state tax to avoid the additional costs it would have created at City Hall. Because marijuana retail sales are an all-cash business, it means that taxes would also be paid in cash.
“If we had someone come in with several thousand dollars in cash, we would have to come up with a process for storing it and getting it to the bank and start worrying about robberies,” Wood said.
Since the money was already included in the budget for this fiscal year, most of it is already spoken for. The tax revenue becomes part of the general fund which pays for things like health insurance and PERS benefits, but roughly 70 percent of the fund is used for police services.
While recreational sales of marijuana walk a fine line between state and federal regulation, Wood said all his interactions with the five dispensaries in Keizer have been positive.
“They’ve been very professional and want to be good citizens,” Wood said.