Voters in Michigan will decide in about 10 days whether they want to legalize recreational marijuana use. A portion of the tax revenue would be routed for road use.
Michigan voters approved medical marijuana use in 2008.
Passage of Proposal 1 on the Nov. 6 ballot would allow individuals 21 and older to purchase, possess and use marijuana and marijuana-infused edibles. A state licensing system for marijuana businesses would also be set up.
Sales of marijuana would be subject to a 10 percent excise tax, in addition to the state’s 6 percent sales tax.
Individuals would be permitted to grow up to 12 marijuana plants at their residences.
Municipalities would be allowed to ban or limit marijuana businesses within their boundaries.
Proposal 1 is estimated to raise $135 million annually in new tax revenue through 2023. The revenue would be dedicated to local governments, education, and road and bridge repairs. Specifically, the first $20 million in tax revenues over the first two years would be applied to research. Remaining revenues would be distributed between roads (35 percent), schools (35 percent), and local governments (30 percent) with marijuana businesses.
Opponents say that states where marijuana use has been legalized has led to problems that include increased substance abuse, and more impaired drivers.
Supporters say it is time to legalize marijuana use because prohibition has failed and enforcement consumes significant resources. They add that legalizing weed and regulating its possession and use could provide needed tax revenue.
Michigan would become the first state to dedicate any tax revenue from marijuana sales for transportation purposes.
More money already benefiting roads
Already this year Michigan state legislators and Gov. Rick Snyder have given approval to a plan to provide funding to fill potholes. Specifically, a supplemental spending bill approved this spring provides an additional $175 million for repair work throughout the state.
“Michigan’s roads are not in good condition and we have heard the frustration from residents about the need for improvement,” Snyder said in previous remarks.
The funds available via the supplemental spending bill and the first round of vehicle taxes and fees are estimated to contribute $800 million in new state funding.
More funding for roads upcoming
A 2015 law is billed to fix the state’s ailing road and bridge system. The $1.2 billion, multi-bill package included authorization of an annual transfer from the state’s general fund to roads, and fuel tax and vehicle fee increases. However, the funding does not take full effect until 2021.
Snyder said additional revenue raised via linking vehicle and fuel tax rates to the consumer price index this year will contribute another $630 million for this season’s transportation work.
Copyright © OOIDA