A blog about Marinwood-Lucas Valley and the Marin Housing Element, politics, economics and social policy. The MOST DANGEROUS BLOG in Marinwood-Lucas Valley.
You have to give it to Colorado. The state's voters legalized recreational marijuana in 2012, transforming the popular stuff from a prohibited vice to a substance that could be produced, bought and sold without the hassle of hiding dealings from the authorities and the fear of arrest for voluntary transactions. Yet the marijuana black market is still going strong over four years later, with many sellers and customers willing to take a chance on legal consequences rather than make a risk-free deal.
Maintaining a profitable black market for a perfectly legal product is quite an accomplishment. But never fear, Colorado lawmakers have a plan—they're moving to ban marijuana advertisements by unlicensed vendors. That should learn 'em.
Except… Given the history of illegal dealings that have prospered even in the absence of Craigslist postings, that's probably not going to do the trick. It doesn't even begin to address the driving force behind the black market, which is taxes so sky high and regulations so burdensome that they make legal pot uncompetitive.
"An ounce of pot on the black market can cost as little as 180 dollars," according to PBS correspondent Rick Karr. "At the store Andy Williams owns, you have to pay around 240 dollars for an ounce. That's partly because the price includes a 15 percent excise tax, a 10 percent marijuana tax, the state sales tax, and Denver's marijuana sales tax."
Colorado also piles on expensive regulatory requirements to get a license, and bars people with criminal records from the business. So, if you don't have the money and legal savvy to cut through the red tape, and were caught selling marijuana before it was legalized, you can't deal in the stuff—within the law.
"Regulations support those that have access to wealth," says marijuana activist Larisa Bolivar. "And middle and lower classes don't have access to wealth. I can't just go and ask my dad, 'Hey, can I have $20,000 for licensing and application fees?' You know? And then 'Can I get a million dollars to get a property?'"
High taxes and regulations encourage black markets in legal goods? But why would state officials know that? How could they ever predict that harassing a market with tax collectors and inspectors instead of cops would keep people underground?
Maybe…because their own experts told them so?
"Rational consumer behavior theory would predict that consumers would choose to buy marijuana from a licensed medical or retail center if the price is comparable to illicit source prices," an advisory report prepared by academics and business consultants for the state suggested in 2014. But "If the price of regulated marijuana remains high, as it has in early 2014, black-market production could continue if it could compete with the regulated market on price."
But even before that, there may have been a hint, here and there, that piling regulations and taxes on a "legal" market is a very effective way of driving business into the shadows. Even confining ourselves to the world of stuff you set on fire and inhale, we can see that higher taxes mean more black market cigarettes and lower taxes mean fewer. 13.5 percent of cigarettes sold in Colorado are sourced on the black market, according to 2013 figures from the Mackinac Center for Public Policy and the Tax Foundation. By comparison, New York, which piles $4.35 in taxes on every pack of smokes (with more added in New York City), in contrast to the $0.84 in Colorado, sees 58 percent of the cigarettes sold in the state smuggled from elsewhere. "One consequence of high state cigarette tax rates has been increased smuggling," the groups point out.
"Conservatively, illegal importation of alcohol into Michigan strips the State of at least $14 million each year," the Michigan Liquor Control Commission estimated in 2007, in an extended complaint about consumers dodging high taxes. Lower-tax neighboring states were named by officials as sources of adult beverages smuggled to avoid Michigan's excessive government take.
Illinois officials alsocomplain about state residents evading their tax regime with black market purchases. Tellingly, they've managed to make "a six-bottle case of vodka that costs $167 in Indiana costs $226 in Illinois and is $18 more than that in Cook County," according to one press report, and they play at being shocked that they have fueled a thriving illicit trade.
Illinois and Michigan also impose rules that raise costs and reduce competition—which sounds like a trial run for Colorado's marijuana market. There's really no excuse for officials in the Centennial State to feign surprise. They're adopting policies that have been tried before, and getting exactly the same results.
So, they're learning, right?
Dream on. We're talking about politicians here. Governor John Hickenlooper wants to increase the marijuana sales tax from 10 percent from 8 percent.
"It seems kind of odd that at the same time they're trying to do something about the black and gray markets they're going to ratchet up the taxes and drive more people to the black and gray markets," state Sen. Pat Steadman (D-Denver) commented.
And those high taxes, along with burdensome regulations, are a big reason why Colorado's marijuana black market continues to hum along in such good health—and is likely to do so well into the future.
Maribeth Bushey votes NO to the sales tax cap increase so that Transportation of Marin (TAM ) may have funds for future un named projects. Diane Steinhauser acknowledges that it is a ridiculous request
Marin officials plan a series of hearing in the next several weeks over recreational and medical marijuana regulation. (David Zalubowski/Associated Press)
Marin supervisors will consider banning non-medical cannabis sales in unincorporated areas of the county on Tuesday morning, while an advisory panel will conduct a separate hearing that evening on applications for medical marijuana dispensaries.
The ban on recreational cannabis, which California voters legalized in November, has been recommended by the county’s Community Development Agency to give the county time to chart its next move before the state begins issuing licenses for non-medical dispensaries after Jan. 1, 2018.
After the November vote, the city councils in San Rafael and Novato enacted moratoriums prohibiting outdoor cultivation of cannabis for recreational use and regulating indoor growing. Under Proposition 64, people 21 or older are allowed to grow up to six plants within a private residence, as long as the area is locked and not visible from a public place.
Tom Lai, assistant director of the county Community Development Agency, said the county’s ordinance would be similar to those moratoria.
“The fact that we’re structuring it as a permanent ban does not foreclose the ability for the board to rescind the ban,” Lai said. Full Story HERE
Editor's Note: I voted against Prop 64 but favor legalization of marijuana. I don't endorse marijuana use but object to setting up layers of government oversight and taxation on a plant. Marin county wants its cut of the profits so it will make it difficult to obtain legal pot. This only provides incentive to black market pot. See this article.
Van Jones gave a video message to the Marin Equity Summit in October 2016 and makes an incredible claim that we have a school in Marin where 40% of the children are homeless.
Does anyone know which school he could be referring to?
Drivers and transit center users in San Rafael are anticipating Sonoma-Marin Area Transit rail service to commence this spring. However, the subsequent extension of SMART to Larkspur puts in motion changes to roads, and the Bettini bus transit center is likely to snarl traffic in downtown San Rafael and potentially Highway 101.
Residents and bus passengers using the center might expect appropriate foresight and planning, but as reported by IJ columnist Dick Spotswood, San Rafael “officials are waiting for SMART’s first trips to determine on-the-ground traffic impacts and only then deal with the problem.”
The impact of SMART extending to Larkspur imposes significant changes to traffic in San Rafael:
• Second and Third streets, with 50,000 daily vehicle trips, will experience delays from trains crossing four times an hour during peak hours.
• The Bettini center, serving 9,000 daily bus riders, must be moved as SMART’s tracks to Larkspur bisect bus platforms. No place has yet been identified to park hundreds of buses entering and exiting the center. The “interim plan” is to park these buses on already congested streets for several years.
• Traffic congestion caused by buses and crossing guards could prevent cars from exiting Highway 101, lengthening commute times for 217,000 daily car drivers.
Why? To make way for a train that SMART projects, in its environmental report, will serve just 231 daily riders, a number not attained until 2035.
A new grassroots organization has formed — Save Our San Rafael — to advocate more rational planning performed in advance of permitting SMART to be extended to Larkspur. This would include a full analysis of the traffic impacts.
Key questions include where to put the relocated transit center, how much it will cost and what to do in an interim period likely to persist for many years.
Exactly how many Golden Gate and Marin Transit buses will fit on city streets, how passengers will safely make connections and how this will impact traffic have not been disclosed.
The San Rafael City Council will consider alternatives at future public meetings.
How much traffic will be created?
According to city staff, the city has no plan to analyze whether trains crossing Second, Third and Fourth streets and Fifth and Mission avenues four times an hour will inhibit cars exiting the freeway. So far, nothing official has been disclosed or made available to the public.
If cars are backed into the gridlock that already exists on Highway 101, hundreds of thousands of commuters on the regional freeway will experience even longer commutes and emit more pollutants — including greenhouse gases — into the atmosphere.
San Rafael’s public works department has claimed an environmental impact analysis is not required. While it may not be legally required, it is morally required.
The City Council and the public ought to be provided the information as to whether SMART’s congestion increasing extension actually increases or decreases emissions.
The city’s wait-and-see approach comes with serious consequences. Once the train crosses Third, under federal law, there is nothing the city can do about the additional traffic.
We propose a logical alternative: Follow the successful quiet zone process implemented by Mayor Gary Phillips. The City Council held three public hearings to consider quiet zones. They were such a success that the method used by Mayor Phillips is being followed by Novato and Sonoma County.
The City Council needs to first conduct a thorough traffic analysis, then repeat this proven approach.
The current wait-and-see approach sets the city on an irreversible disaster course. Save Our San Rafael seeks to put planning on the right track to truly relieve traffic and fight climate change.
Richard Hall is a transportation and planning activist in Marin and one of the founders of Save Our San Rafae
January 24, 2017. Novato Councilperson Pam Drew challenges TAM director Diane Steinhauser and TAM chairperson Stephanie Moulton Peters of Mill Valley with their confusing language of the sales tax measure and rush for approval. Ever defiant, Moulton Peters rudely interrupts Drew to stop her inquiry.
Although this effort failed in 2016, progressive Democrats in Sacramento have a veto proof majority and are committed to changing the 2/3 vote requirement for taxes to a simple majority. This would have a massive impact on California's economy.
Tuesday, January 19, 2016 | Sacramento, CA | Permalink
California voters could be asked this fall to touch what’s been an untouchable law: the property tax initiative known as Proposition 13. A potential November ballot proposal would raise taxes on the state’s highest-value properties and spend the money on anti-poverty programs.
After nearly 40 years, Proposition 13 is known as the third rail of California politics: you touch it, you die.
But don’t tell that to the Daughters of Charity. The order of Catholic nuns is one of several major donors to an effort to raise taxes on properties valued at more than $3 million.
“It’s a multi-faceted approach to try to get people out of poverty,“ says veteran Democratic strategist Bill Carrick, who's running the campaign. “That’s the point of it. We’re trying to keep in place — I think we do keep in place — the fundamental protections of Proposition 13,” which caps property taxes at 1 percent of the property's value and limits increases to 2 percent a year.
New revenues could reach $7 billion a year and would fund anti-poverty initiatives — including early childhood education, job training and welfare programs.
Carrick says few homeowners would be affected. But Allan Zaremberg with the California Chamber of Commerce says the measure would reach beyond the rich.
“In California, if you have a small restaurant, you’re probably renting from somebody who has a property of $3 million or more,“ Zaremberg says. “So you’re gonna pay more in rent. And you just can’t afford that.”
Democrats despise Proposition 13. But the party establishment doesn’t like this measure. It took a hard look at Proposition 13 — but decided to focus instead on extending the Proposition 30 income tax increases.
Democratic consultant Steve Maviglio says there’s no doubt California needs major tax reform, “but what a lot of people want to do is put everything on the ballot this year, instead of being more surgical about how to get there. We know what can win, which is a Proposition 30 extension. Anything you touch on Proposition 13, which has always been and always will be the third rail of California politics, becomes more problematic.”
That problem isn’t going away. Carrick says his campaign has collected roughly half the voter signatures it will need to reach the November ballot.
Jan 24, 2017 Novato council person Pat Eklund calls out TAM for the confusing language concerning increasing the Sale Tax. It reads,
"CONSIDERATION OF SUPPORT FOR THE TRANSPORTATION
AUTHORITY OF MARIN IN THEIR EFFORT TO REMOVE A STATE
PROCEDURAL OBSTACLE TO ALLOW A COMMUNITY
CONVERSATION AND MAXIMUM FLEXIBILITY FOR LOCAL
JURISDICTIONS" .
The language is clearly meant to confuse the public. The city manager placed it on the agenda as instructed. TAM director Diane Steinhauser and TAM chairperson Stephanie Moulton Peters use the same language everywhere in Marin . It is a Brown Act violation to obscure language on agendas.
Lifting the sales tax will most certainly be the first step to a permanent sales tax increase.
