Missouri has approved up to $1.7 billion in tax incentives in an effort to lure Boeing’s new 777x airliner production plant to St. Louis County. Still, the bid might fall considerably short of pending proposals from California, Texas, and Washington.
Earlier, Washington approved an $8.7 billion tax-incentive program for Boeing, but union employees turned down a contract offer that would have slashed pension benefits. How could Washington approve such a massive incentive plan?
Here's one theory: The state is about to start reaping millions of dollars in new tax revenue from the legal sale of marijuana. An estimated 300 state-regulated retailers could open next year in Washington. The initiative that legalized marijuana sales instituted a 25 percent excise tax “on each level of the system: producer to a processor, processor to a retailer, and retailer to the customer.” There also will be Building and Operation taxes on the production and local retail sales taxes. Some estimates say Washington could bring in $5 billion within five years, depending on how much legal marijuana is sold and whether the U.S. Justice Department gets involved.
Meanwhile, in Colorado, state-controlled pot sales were legalized through a vote of the people and can begin January 1. Earlier this month, voters also approved a 25 percent tax rate to go along with the 2.9 percent state sales tax. Some municipalities, like Denver, tacked on a 3.5 percent local tax. The non-partisan Colorado Legislative Council estimates the new taxes will bring Colorado $33.5 million in the first year and $67 million in year two. That’s approximately $100 million in two years. Can you say “cha-ching”?
Could Missouri be bold enough to reap the financial benefits of reefer? There are currently 10 proposed petitions on the Missouri Secretary of State's website that could lead to a vote on the legalization of marijuana. The proposed petitions differ in the amount of marijuana that a person can legally posses and the number of plants that can be grown, though none of them call for legal sales in the state.
“I hope everyone recognizes by now that marijuana is not just going to go away," says Dan Viets, a Columbia attorney who's also state director for the National Organization for Reform of Marijuana Laws. "No matter how much we squander on law enforcement, it’s not going to eliminate marijuana."
In other words, like Colorado and Washington, Missouri could find a way to turn a financial liability into an asset.
Commentary by Alvin Reid
