Voicing frustration over a lack of ways to fund local services, the Missoula City Council on Wednesday jumped at the opportunity to support a special election asking voters to adopt a 3% local option sales tax on the sale of marijuana at dispensaries within the county.
If Missoula County commissioners place the decision on the ballot, and if voters approve the 3% tax, the estimated $322,000 earmarked for the city would be used for property tax relief, according to the resolution adopted on Wednesday.
“It recommends using that revenue for property tax reduction,” said Jessica Miller, the city’s citizen services manager. “It recognizes the shift to residential property tax payers over the decades, and how much that burden is falling on our residents and home owners, where it used to be businesses and other sources.”
The rise in property taxes is partially due to decisions made over the years by the Legislature, which has shifted the burden of many essential services to local taxpayers.
That includes everything from mental health care to the revocation of the gas tax adopted by Missoula voters last year. The state also fails to reimburse the full cost of housing its own inmates held at the county detention center.
The revenue from the 3% excise tax is estimated at around $716,000 annually. The county would receive 50% of that revenue, the city 45% and the rest would go to the state for administrative purposes.
The city’s share is estimated at around $322,000.
“We don’t get to place a sales tax on very many things,” said council member Amber Sherrill. “As we have talked about, endlessly, ways to achieve property tax reduction under the current tax structure we have is very difficult.”
When the bill legalizing recreational marijuana in Montana was signed into law, it permitted counties where a majority of voters approved legalization to consider the 3% local excise tax.
The tax would apply to all existing marijuana dispensaries within the county. According to Missoula County, 48 local dispensaries are currently registered with the Montana Department of Health and Human Services.
“What we’re starting to see is that local governments need more flexibility in terms of being able to generate the revenues to build their communities,” said council member Heather Harp. “This is a good idea and I’m glad to see that our county commissioners feel the same way.”
The commissioners opened their public hearing on the issue last week and are expected to make a final decision on whether to place the option on the ballot later this month. They have the support of the city, including Mayor John Engen.
“I view recreational marijuana in the same way I view alcohol, which is another drug that’s legal in the state of Montana,” Engen said. “But with alcohol, we don’t have the local option, and I wish we did.”
The resolution supporting the county’s decision placing the option on the ballot passed the City Council’s Administration and Finance Committee on a 7-1 vote, with only council member, Sandra Vasecka, voting in opposition.
“I disagree with all the sin taxes,” she said, naming taxes on alcohol and tobacco. “The price increase goes directly on the consumers, especially low-income consumers. It’s just another opportunity to tax our constituents.”