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Sorting out marijuana tax distributions

Details missing in communications to counties and cities
Richard Hanners

Blue Mountain Eagle

Published on July 24, 2018 5:08PM


State marijuana tax payments that initially perplexed Grant County officials are getting sorted out — but only after the county court mistook its discretionary share as earmarked for alcohol or drug abuse prevention and treatment.

According to state law, Oregon counties that allow recreational marijuana businesses to operate in their jurisdictions each receive a share taken from 10 percent of the taxes collected from recreational marijuana businesses across the state.

Cities also receive a share from another 10 percent of the total collected. The city and county shares are based on population size and the number of marijuana businesses in each city or county.

In addition, 40 percent of the marijuana tax revenue collected by the state goes to the State School Fund, 15 percent to the Oregon State Police, 20 percent for mental health treatment or for alcohol and drug abuse prevention and 5 percent for purposes related to alcohol and drug abuse prevention, early intervention and treatment.


Discretionary shares


Grant County and its eight cities initially all opted out of allowing recreational marijuana businesses, but they nonetheless received a share of the marijuana tax revenue collected by the state through July 1, 2017, before the tax distributions shifted only to those jurisdictions allowing marijuana businesses.

The county received two checks from the Department of Revenue in November and January totaling $15,175. Emails from the DOR to Grant County Treasurer Julie Ellison described the payments as “state shared revenue distribution” from marijuana taxes with no further explanation.

Blue Mountain Hospital CEO Derek Daly subsequently asked the county to provide the $15,175 to the Community Health Needs Assessment Substance Abuse Committee to fund a variety of projects to increase public awareness of substance abuse.

Lisa Weigum, a substance abuse prevention coordinator with Community Counseling Solutions, spoke to the Grant County Court in support of Daly’s request at the court’s April 11 meeting.

Grant County Judge Scott Myers noted in the meeting that the county wasn’t sure how the money should be spent, and the court unanimously approved the request.

It has since been determined that this money was not earmarked for treatment and prevention, and the county could have spent the funds for law enforcement, roads or any other county needs.

DOR Communications Operations Manager Joy Krawcsyk confirmed this in emails to the Eagle July 13.


Earmarked shares


On April 4, Grant County received $18,362 from the Oregon Health Authority representing marijuana taxes collected from July 1, 2017, through March 31. An email from OHA to Ellison described the payment as “marijuana tax revenue transfers” with no further explanation.

During the county court’s June 13 meeting, Community Counseling Solutions Executive Director Kimberly Lindsay requested that the $18,362 be provided to CCS for drug or alcohol treatment and not for prevention.

Commissioner Jim Hamsher, however, objected to Lindsay’s request, saying he believed the $18,362 payment was the discretionary money, and the county could spend it on a variety of uses. He read a portion of the state law at the meeting to back up his point.

The court took no action on Lindsay’s request, and the $18,362 remained on the county books. But according to a July 13 email to the Eagle from Nicole Corbin, an adult behavioral health services manager at the Oregon Health Authority, “the $18,362 must be spent for alcohol and other drug treatment or prevention services.”


John Day’s payment


John Day City Manager Nick Green told the Eagle the city received only one marijuana tax payment from the state, but unlike the county there was no explanation.

“We have received no such letters in John Day,” he said in an email. “No correspondence of any kind from either OHA or the DOR with regard to marijuana funding.”

The John Day City Council on Feb. 3 unanimously approved providing its $4,945 share in the state’s supplemental marijuana tax for 2017 to the Community Health Needs Assessment Substance Abuse Committee to support education on substance abuse issues.

But that money fell into the 10 percent share all Oregon cities received and could have been spent at the discretion of the city council and not dedicated exclusively to alcohol or drug abuse prevention or treatment.

Green said the city ended up using its Community Development Fund to pay CHNA and then backfilling that amount later using the state marijuana tax payment.


Other counties and cities


Grant County and John Day were not alone in their confusion about marijuana revenue payments from the state, as shown by emails received by the Eagle.

“You are not the only person, and Grant is not the only county, to have some confusion about the marijuana tax dollars,” Corbin said June 25.

The city of Hines, which opted to allow marijuana businesses, had difficulties understanding the state payments, according to City Administrator Judy Erwin. She said communication with the cities seemed “haphazard and not very well administered.”

“They always just send the money without any explanation of how they arrived at the amount, and it is always paid late,” she said, adding, “I think they are sending money to the county for payment to the health department, although the county is not sure that’s what it’s for. The money just showed up, and since the county opted out, no one was sure.”

Deschutes and Malheur county officials told the Eagle they originally had questions about money they received as well.


Future changes


A new law signed by Gov. Kate Brown on April 3 establishes an Oregon Marijuana Account separate and distinct from the state’s general fund. The Department of Revenue will distribute funds on a quarterly basis.

According to Corbin, the new bill will allow the Oregon Health Authority to provide money directly to intergovernmental agreements between counties and mental health providers, such as Community Counseling Solutions.

Grant County voters overturned the ban on recreational marijuana businesses in May. Myers has said he will seek to impose a 3 percent tax on recreational marijuana businesses as allowed by state law. That revenue will be discretionary, and the county can use it for any purposes it sees fit.



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