School superintendent: Marijuana tax revenue should stay in Clark County
Six weeks into Nevada’s recreational marijuana sales, the tug-of-war over education dollars tied to the tax revenue has begun.
Clark County School District Superintendent Pat Skorkowsky made the first move when he announced during a public meeting Monday that he was “disappointed” with the funding arrangement, which funnels marijuana tax revenue into the state pot for education funding known as the Distributive School Account.
“We need to find a better way to utilize those dollars where they are collected — here in our county,” he told a legislative advisory committee that’s monitoring the school district’s reorganization effort. “That is your charge as legislators to protect Southern Nevada.”
It was only a matter of time before the decades-long battle over state money, which often pits north against south and rural areas against urban centers, surfaced regarding Nevada’s legalized weed industry. The kickoff of recreational marijuana sales brought snaking lines of customers to dispensaries, triggering hopes that the businesses would boost public education as proponents had preached.
Skorkowsky said the state should “rethink” how the marijuana tax dollars are distributed to schools because the revenue generated in Clark County doesn’t necessarily stay there under the current set-up.
“I can’t grow silver and gold in Clark County,” he said, referencing resource-driven economic opportunities in other parts of the state. “That revenue collected here could have impacted our students.”
But state officials contend it’s a moot point because language in the ballot initiative says the tax revenue should go to the Distributive School Account (DSA).
Gov. Brian Sandoval’s chief of staff, Mike Willden, said the Department of Taxation collects the 15 percent wholesale tax imposed on recreational marijuana in addition to licensing fees. After paying for regulatory costs at the state and local level, the department will transfer the remainder of that tax revenue — estimated to be $20 million this fiscal year — to the DSA.
Lawmakers opted to put revenue from the 10 percent retail tax on recreational marijuana, which was proposed by Sandoval, into a “rainy day” reserve fund rather than directly into the DSA, Willden said. Plus, the state’s budget bills already had moved by the time Republicans agreed to support the pot-tax measure, so re-opening those bills would have posed a hurdle at the very end of the legislative session.
Instead, lawmakers moved roughly $63.5 million from the state’s general fund to the DSA because that’s how much the retail tax on recreational marijuana is expected to bring in over the biennium — $26.5 million in fiscal year 2018 and $37 million in fiscal year 2019.
The switch takes the “guesswork” out of budgeting education money with a new revenue stream, especially if retail tax were to underperform, Willden said.
Skorkowsky’s criticism of the distribution method comes as the district contemplates how to close a roughly $45 million budget shortfall for the upcoming year. Arbitration costs and less-than-expected funding from the state have contributed to that deficit.
The state’s per-pupil allocation to Clark County has been a constant source of resentment for school officials, who say the district has been chronically underfunded over the years. Clark County will receive $5,700 per student for the upcoming school year — $26 less than what the school district had expected to receive.
Only the Washoe County School District received a lower per-pupil allocation: $5,677. But in the final hours of the legislative session, lawmakers approved an additional $5 million for the northern, urban district.
Even so, the DSA funding follows enrollment numbers, meaning Clark County winds up with the lion’s share of money because it has the largest student population. State education officials say the lower per-pupil funding to Clark and Washoe counties is partially because those urban areas have other economic drivers that produce local tax revenue for schools.
Addressing Skorkowsky’s concern, Willden noted that the DSA has several funding streams, such as the slot tax and mineral leasing revenue, that don’t necessarily stay in their county of origination.
Plus, the Nevada Constitution bans any changes to an initiative measure by the Legislature within three years from the date it takes effect.
“Legislators hands are tied, and everybody has to go along with it because that’s what appeared on the ballot,” Greg Bortolin, a spokesman for the Nevada Department of Education said.
Skorkowsky, however, appears to have at least one lawmaker on his side — the champion of legalized marijuana, state Sen. Tick Segerblom.
The Democratic politician, who is running for the Clark County Commission, said the state needs to keep an eye on marijuana tax dollars and ensure they benefit counties that have marijuana dispensaries and cultivation and production facilities.
“Why should we as Clark County be supporting counties such as Douglas County that won’t even allow it?” Segerblom said. “That’s criminal as far as I’m concerned.”