Gov. Inslee would use a portion of marijuana excise tax revenue for community reinvestment grants

By: Emily Makings
12:15 pm
December 29, 2021

Gov. Inslee’s supplemental operating budget proposal would transfer $125.0 million from the dedicated marijuana account to a new community reinvestment account. The money would then be used by the Department of Commerce for community reinvestment grants for communities that “have experienced historically and inequitably enforced criminal laws and penalties for illegal drug sales, possession and use” (see page 74 of the governor’s budget highlights document). The grants would be used for economic development, civil and criminal legal assistance, community-based violence intervention and prevention services, and reentry services.

A study would be due by March 15, 2023 that would “analyze the racial, economic, and social disparities created by the historical design and enforcement of state and federal criminal laws and penalties for illegal drug sales, possession, and use in Washington state.” The budget proposal specifies that the study “should include recommendations to target funding to the populations and communities determined to have been most impacted by the historic, inequitable design and enforcement of these criminal laws and penalties.”

The enacted 2021–23 budget appropriated $163.7 million from the dedicated marijuana account. The governor’s supplemental would appropriate an additional $2.0 million from the account, in addition to the $125.0 million transfer. The dedicated marijuana account balance is made up of marijuana excise taxes, license fees, and penalties.

The marijuana excise tax is a growing source of state tax revenue. In fiscal year 2021, marijuana excise tax collections grew by 18.4% to $554.9 million. (They grew by 20.2% in FY 2020.) In 2019, marijuana excise tax collections first exceeded the sum of collections from the alcohol taxes (liquor sales, liquor liter, beer excise, and wine excise). Marijuana excise tax collections have exceeded collections from the cigarette tax since 2018. According to the November revenue forecast, marijuana excise tax collections “appear to be moderating” going forward.

Categories: Budget , Categories , Tax Policy.
Tags: 2021-23