Was I-502 Tax Money Not Distributed as Voters Intended?

pottaxes

By John Novak

It appears that no tax money was ever paid out as intended by the voters for I-502.  The WSLCB has stated in a public records request response that they’ve “…performed a search of our records including inquiry to the Finance Division for the WSLCB. We have discovered no records that are responsive to this request, as the Finance Division has indicated to us no such disbursements have occurred to date.”

No disbursements?

Where did the money go?  That’s over one year’s worth of tax money, around $70 MILLION, promised to different stakeholders that endorsed and supported the initiative during the I-502 campaign.Two days after this response from the WSLCB, I see this headline:
 What happened to the $70 million collected the first year?
“According to the state Liquor and Cannabis Board, the total marijuana sales (sale price plus tax) from July 1, 2014, through June 30, 2015, tallied almost $260 million. Of the $6 million in marijuana excise taxes Washington state will distribute this fiscal year, cities will receive 40 percent, and the counties will receive 60 percent.”
So the WSLCB has been sitting on it until the legislators changed the statutes so law enforcement and the cities would get your tax dollars instead.
That is not what the voters wanted back in 2012 and unless they plan to pay those original earmarks this sounds to me like a fraud on taxpayers.  Although with the way laws are written, it’s probably legal.The question is, who decided this policy of withholding funds and when was it decided?  What about the other $63 Million?According to the initiative as passed by the voters, the WSLCB has control over these funds…

NEW SECTION. Sec. 26. (1) There shall be a fund, known as the dedicated marijuana fund, which shall consist of all marijuana excise taxes, license fees, penalties, forfeitures, and all other moneys, income, or revenue received by the state liquor control board from marijuana-related activities. The state treasurer shall be custodian of the fund.
(2) All moneys received by the state liquor control board or any employee thereof from marijuana-related activities shall be deposited each day in a depository approved by the state treasurer and transferred to the state treasurer to be credited to the dedicated marijuana fund.
(3) Disbursements from the dedicated marijuana fund shall be on authorization of the state liquor control board or a duly authorized representative thereof.
Section 28 lays out how the tax money will be used…
NEW SECTION. Sec. 28. All marijuana excise taxes collected from sales of marijuana, useable marijuana, and marijuana-infused products under section 27 of this act, and the license fees, penalties, and forfeitures derived under this act from marijuana producer, marijuana processor, and marijuana retailer licenses shall every three months be disbursed by the state liquor control board as follows:
(1) One hundred twenty-five thousand dollars to the department of social and health services to design and administer the Washington state healthy youth survey, analyze the collected data, and produce reports, in collaboration with the office of the superintendent of public instruction, department of health, department of commerce, family policy council, and state liquor control board. The survey shall be conducted at least every two years and include questions regarding, but not necessarily limited to, academic achievement, age at time of substance use initiation, antisocial behavior of friends, attitudes toward antisocial behavior, attitudes toward substance use, laws and community norms regarding antisocial behavior, family conflict, family management, parental attitudes toward substance use, peer rewarding of antisocial behavior, perceived risk of substance use, and rebelliousness. Funds disbursed under this subsection may be used to expand administration of the healthy youth survey to student populations attending institutions of higher education in Washington;
(2) Fifty thousand dollars to the department of social and health services for the purpose of contracting with the Washington state institute for public policy to conduct the cost-benefit evaluation and produce the reports described in section 30 of this act. This appropriation shall end after production of the final report required by section 30 of this act;
(3) Five thousand dollars to the University of Washington alcohol and drug abuse institute for the creation, maintenance, and timely updating of web-based public education materials providing medically and scientifically accurate information about the health and safety risks posed by marijuana use;  
(4) An amount not exceeding one million two hundred fifty thousand dollars to the state liquor control board as is necessary for administration of this act;
(5) Of the funds remaining after the disbursements identified in subsections (1) through (4) of this section:
(a) Fifteen percent to the department of social and health services division of behavioral health and recovery for implementation and maintenance of programs and practices aimed at the prevention or reduction of maladaptive substance use, substance-use disorder, substance abuse or substance dependence, as these terms are defined in the Diagnostic and Statistical Manual of Mental Disorders, among middle school and high school age students, whether as an explicit goal of a given program or practice or as a consistently corresponding effect of its implementation; PROVIDED, That: (i) Of the funds disbursed under (a) of this subsection, at least eighty-five percent must be directed to evidence-based and costbeneficial programs and practices that produce objectively measurable results; and (ii) Up to fifteen percent of the funds disbursed under (a) of this subsection may be directed to research-based and emerging best practices or promising practices. In deciding which programs and practices to fund, the secretary of the department of social and health services shall consult, at least annually, with the University of Washington’s social development research group and the University of Washington’s alcohol and drug abuse institute;
(b) Ten percent to the department of health for the creation, implementation, operation, and management of a marijuana education and public health program that contains the following: (i) A marijuana use public health hotline that provides referrals to substance abuse treatment providers, utilizes evidence-based or research-based public health approaches to minimizing the harms associated with marijuana use, and does not solely advocate an abstinence-only approach;
Sources:

One Year Of Legal Marijuana Generated $70 Million In Tax Revenue For Washington State
Posted: http://www.huffingtonpost.com/2015/07/06/washington-marijuana-taxes-70-million_n_7737722.html

Vancouver to receive $790,000 in pot excise taxes
Published: October 1, 2015, 6:36 PM
http://www.columbian.com/news/2015/oct/01/vancouver-to-receive-800000-in-pot-excise-taxes/

House Bill 2136 (Effective date 7/1/2015) - Concerning comprehensive marijuana market reforms to ensure a well-regulated and taxed marijuana market in Washington state.
http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bills/Session%20Laws/House/2136-S2.SL.pdf

Initiative 502 – Full copy of the initiative as passed by voters in November, 2012
http://www.newapproachwa.org/content/initiative

Full response from the WSLCB via email about my public records request:

From: missy.norton@lcb.wa.gov
To: changingplanet@hotmail.com
Subject: FW: Amended Request RE: WSLCB PRR 15-07-123
Date: Tue, 29 Sep 2015 22:15:29 +0000

Dear Mr. Novak:

This letter further responds to your public records request. 

The Washington State Liquor Control Board (WSLCB) received the attached public records request from you on July 22, 2015. We first wrote to you regarding your request on July 29, 2015. We received your amended request on July 30, 2015.

You have phrased your amended request as follows: “This is a public records request for all official public records of disbursement of funds, any warrants, vouchers, receipts, checks issued and communications about same under I-502. The dates I am requesting is everything between January 1, 2012 to present, in electronic format, if possible.” You also attached as a reference two statutes: RCW 69.50.540 (“Marijuana excise taxes – Disbursements”) and RCW 40.14.010 (“Definition and classification of public records”). We interpret your request as seeking “any warrants, vouchers, receipts, checks issued and communications” pursuant to RCW 69.50.540 (“Marijuana excise taxes – Disbursements”).

We have performed a search of our records including inquiry to the Finance Division for the WSLCB. We have discovered no records that are responsive to this request, as the Finance Division has indicated to us no such disbursements have occurred to date.

If you wish to rephrase and submit a different request for identifiable records in the future, we would be pleased to process that request as we have in the past. We have neither redacted nor deleted any record that is responsive to your request as we have interpreted it, and again we respectfully deny the rephrased request that you submitted on or about July 22, 2015, as no disbursements have occurred under the statutory basis that you provided. 

If you have any questions, please feel free to contact me. Thank you.

Sincerely,

Missy Norton
Records Manager
Office – 360-664-1693/Fax – 360-664-9689 mka@liq.wa.gov

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