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Segerblom, Councilwoman Tarkanian call for special session to direct marijuana tax money to schools, not savings account

Michelle Rindels
Michelle Rindels
IndyBlogMarijuana
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Democratic state Sen. Tick Segerblom and Las Vegas City Councilwoman Lois Tarkanian made a formal call Monday for a special legislative session to reroute proceeds from a marijuana tax to schools, rather than the state’s “rainy day” reserve account.

The two officials — who fell on opposite sides of the marijuana legalization debate — want to reverse a last-minute move in the 2017 legislative session that sent proceeds from a 10 percent excise tax on recreational marijuana into a savings account, rather than to education as Republican Gov. Brian Sandoval initially proposed.

“If the two of us can agree on something, then I think the whole state can agree,” said Segerblom, considered the foremost marijuana proponent in the Legislature, at a press conference at Las Vegas City Hall. “Let’s focus on the fact that that money needs to get out there, and the sooner the better.”

Sandoval, who has authority to call a special session, threw cold water on the idea.

"The Governor believes a special session is unnecessary as this is a policy discussion for the next session of the Legislature," said a statement from Sandoval's office, adding that schools still received the money he had originally planned to derive from marijuana taxes.

A special session would require lawmakers travel to Carson City. While Segerblom said he thinks the session would take just one day, reconvening the Legislature in the off-season has a cost — a four-day special session in 2015 cost the state $250,000, for example.

Segerblom said he doesn’t yet have commitments from legislative leaders such as Assembly Speaker Jason Frierson and Senate Majority Leader Aaron Ford to lobby for the special session, and the leaders didn’t immediately respond to an inquiry from the Independent. If two-thirds of lawmakers agree, the Legislature can call itself into special session without help from the governor.

Segerblom and Tarkanian said they frequently hear complaints that marijuana money is not going to education as planned. Indeed, even after marijuana proceeds started flowing in, the Clark County School District announced a $60 million budget shortfall.

But claims that voter intent is being circumvented may be based on a misunderstanding of the multiple taxes on marijuana.

The money Segerblom and Tarkanian want to redirect — a projected $75 million in the current two-year budget period — is Sandoval’s brainchild and is above and beyond the tax approved in a statewide vote in 2016. The marijuana legalization ballot question only required a 15 percent tax on wholesale marijuana sales, and directs money first to administrative and regulatory expenses, with leftovers going to the Distributive School Account, the sort of general fund for public education.

The state projected to bring in $24 million from the wholesale tax in the current fiscal year that lasts through June. It expects to use $13.8 million of that for state and local administrative costs, according to the Nevada Department of Taxation, leaving only about $10 million of the voter-approved wholesale tax going to education.

Sandoval’s 10 percent excise tax, which is layered on top of the 15 percent wholesale tax, was initially destined for schools but was held up in the final days of the legislative session when Republicans in the minority held a showdown to try to fund Education Savings Accounts. When Republicans finally conceded the battle, it was no longer possible to tie the marijuana tax to education funding because of a procedural rule, and it was instead sent to reserves.

The rainy day fund, meant to help the state weather future downturns, currently holds about $157 million. By comparison, the state’s two-year budget is more than $8 billion.

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