With the gigantean revenue deficits that California has been experiencing these past years, almost every remedy that can be utilized is now being considered as an option. Solutions that as recent as ten years ago would seem absurd have started to find its way to mainstream audiences, media, and politics, and quite naturally, have started to cause a stir among the citizens of California. One of these solutions, with hopes of curbing the ever-growing revenue deficit that the State is facing, is through the legalization of Marijuana.
Governor Arnold Schwarzenegger, in referring to the legalization issue, had stated that, “he would look at marijuana legislation as a potential means for tax revenue” (Cochran, 2009, p. 1). Its legalization is estimated to be a huge source for additional revenues, as stated in a study by Jon Gettman, a senior fellow at George Mason University’s School of Public Policy: the annual American marijuana trade is estimated to be $113 billion, and as a result of the federal expenses on drug enforcement and would-be taxes, the government losses an estimated $42 billion annually just by keeping marijuana illegal (Dyer, 2009, p. 1).
Tom Ammiano, a Democrat Assemblyman from San Francisco, hopes to make California the first State in America to legalize marijuana, through tax and regulation, in the same approach as with alcohol. In an interview with L.A. Times in February of this year, he had expressed that, “California always takes the lead—on gay marriage, the sanctuary movement, medical marijuana” (Bailey, 2009, p. 1). Known as the AB 390, this bill, if approved, would basically copy the existing regulatory organization applied in alcoholic beverages, setting the age cap to 21 years old. Present estimates have put California’s marijuana industry at $14 billion yearly, surpassing that of vegetables, with $5.7 billion, and grapes, with $2.6 billion. The passing of this bill would result in an additional yearly revenue of $1.3 billion for California (Bailey, 2009, p. 1).
This movement seemed to have public support. In the May 19 editorial of the National Review Online, it was stated that 56 percent of California residents agreed on the imposition of a marijuana tax to minimize its budget deficit (The editors, 2009, p. 1). Simply stated, Californians seem to agree that the perennial problem brought about by the restrictions on marijuana would in fact be beneficial if it were to be legalized, with some legal limitations still observed.
Still, simply legalizing marijuana use does not necessarily mean an easy raking of state revenues. An efficient system-design would be important in monitoring the by-laws and the tax collection itself, along with the danger of a rise in substance abuse, although researches have been conflicting on whether pot abuse opens the door to the eventual usage of other stronger substances (Segal, 2009, p. 1).
Treating this bill without any downside would be outright naiveté. Even if this bill were to generate the projected $1.3 billion additional revenue, California’s $42 billion deficit would still leave a huge gaping hole with no immediate plug-in solution; as was reported in the editorial of National Review Online, “the belief that a marijuana tax is going to provide an easy fix to California’s budget problems is a vapor” (The editors, 2009, p. 1). It is perhaps accurate to surmise that California’s present budgetary predicament may be blamed to its excessive spending and not due to insufficient taxation, and it would be fatalistic to assume that imposing a tax on marijuana, even a high one, would mend the damage brought about by the local federal government (The editors, 2009, p. 1). The people behind the liberalization of marijuana should not exploit the crisis in California, and instead should lay bare the important and relevant principles surrounding this issue. After all, in a general view, this concerns not only the political and financial aspects, but most importantly, socially-related issues, then present it on the proper forum—the authorities in Washington, D.C.
References
- Bailey, E. (2009, February 24). Taxing pot could become a political toking point. L.A. Times.com.
- Cochran, S. (2009, May 7). C.A. Governor Schwarzenegger looks to illegal drugs for revenue. Associated Content News.
- Dyer, J. (2009). A budget cure: Marijuana taxes? MSN Money.
- Segal, J. (2009, February 11). The audacity of dope: Could legal marijuana save California’s economy? The Big Money.com.
- The Editors (2009, May 19). High taxes. National Review Online.