More than 70% of Missoula County voters approved a ballot initiative last year legalizing the sale of recreational marijuana – a figure that far surpassed the 56% of statewide voters who placed their support behind the measure.
Now, Missoula County commissioners will decide whether to hold a special election asking voters to approve an excise tax of up to 3% on the sale of recreational pot. Elected officials will also decide where to direct the revenue.
“There are a whole range of uses to which the revenue could be put,” Commissioner Dave Strohmaier told the Missoula Current on Tuesday. “There’s a tax relief element that’s probably baked in to any revenue from a potential marijuana tax.”
If voters approved taxing recreational marijuana at the local level, the tax would go into effect 90 days later and raise an estimated $716,000 annually. And it wouldn’t be the first time Missoula voters approved a local-option tax.
Last year, voters also adopted a 2-cent local option fuel tax, which was earmarked for roads and infrastructure. That tax was to raise an estimated $1.1 million annually, of which tourists would have contributed roughly half.
But this spring, the Legislature revoked the local option fuel tax and Gov. Greg Gianforte signed the bill. Missoula County and other lobby groups had pushed for a different outcome, saying the revenue was sorely needed to keep up with the rising cost of infrastructure.
Without the local option fuel tax, a 3% tax on recreational marijuana could help close the gap. Like the road tax, tourists would contribute to the funding.
“We had a local option gas tax nullified this last legislative session, and there are hard choices in front of us in how we’ll maintain our roads and infrastructure,” Strohmaier said. “Beyond the gas tax we no longer have, we must decide how we’re going to provide other essential services without continuing to raise property taxes.”
When the bill legalizing recreational marijuana was signed into law, it permitted counties where a majority of voters approved the bill to consider the 3% local excise tax. The tax would apply to all existing marijuana dispensaries within the county.
According to Missoula County, 48 dispensaries are currently registered in the county with the Montana Department of Health and Human Services. While the county hasn’t officially considered whether to place the excise tax on the ballot, the revenue uses could be far reaching.
“Missoula County is growing fast and as more people live here, we need to extend services further out and to those folks,” said Commissioner Josh Slotnick. “The property tax any one household pays does not cover the cost of providing service to those households. Those costs are spread among all of us, but having an additional source of revenue lightens the burden on all of us.”
Based on current projections compiled by the Bureau of Business and Economic Research at the University of Montana, a 3% excise tax would generate around $716,100 annually. Missoula County would retain 50% of the revenue and 45% would go to the City of Missoula.
The remaining 5% would go to the Montana Department of Revenue to defray the costs of administering the tax. It’s expected that the city will ask the county in the coming weeks to adopt a resolution of support for the tax.
“The marijuana tax would arrest or slow property tax growth a little bit,” Slotnick said. “We’re a bit reticent to say it will go here or there. We don’t know how much money is going to be raised. It’s all based upon projections. We’re going to proceed with care on this.”
The county will hold a public hearing on the issue on July 1. A vote on the decision was scheduled for July 6 but has been postponed due to the holiday.