Pubdate: Fri, 23 Jul 2010
Source: Oakland Tribune, The (CA)
Copyright: 2010 Bay Area News Group
Contact: http://www.insidebayarea.com/feedback/tribune
Website: http://www.insidebayarea.com/oaklandtribune
Details: http://www.mapinc.org/media/314
Author: Angela Woodall, Oakland Tribune

OAKLAND COUNCIL OPTS FOR TIERED MEDICAL POT TAX INCREASE

The City Council has made it more likely that Oakland residents will 
see tax increases on everything from telephones to medicinal pot.

Despite sharp criticism for their financial stewardship, council 
members are poised to give their blessing to several measures aimed 
at boosting revenue to the cash-strapped city, which could face a $50 
million budget gap next year.

But they stopped short of voting to put the measures, some of which 
were reworked during the special City Council meeting, on the November ballot.

A public safety parcel tax of up to $360 a year on single-family 
homes could net Oakland the largest increase of any of the taxes 
proposed - $25 million the first year and $51 million the next year.

But the majority of attention at Thursday's special meeting revolved 
around an increase of the city's medical marijuana business tax.

After two hours of public comments and council deliberation, council 
members decided to table a proposal that could have brought in $28 
million. Instead they opted for a tiered tax rate based on a 
last-minute proposal by at-large Councilmember Rebecca Kaplan.

The new plan includes a 2.5 percent tax on dispensaries, putting it 
in line with Berkeley if voters approve the rate in November. 
Oakland's tax would be as much as 8 percent on cultivators, allowing 
the city to capitalize on new rules allowing large-scale pot 
cultivation approved by the council just days ago.

The city also would levy up to a 10 percent tax rate on facilities 
that sell marijuana for recreational use if California voters pass a 
statewide initiative to legalize marijuana in November.

The rate increases would not be retroactive.

Kaplan justified the different rates, saying other industries are 
taxed differently based on whether they are retail or 
production-related. The original plan - an increase of up to 12 
percent - faced hot opposition from moderate-sized dispensary 
operators and growers.

Steve Deangelo, executive director of Harborbay Health Center, the 
largest dispensary in California, warned that the plan would force 
Oakland dispensaries and growers to close down, taking potential 
revenue with them.

But he refused to reveal how much the nonprofit dispensary pays the 
highest-earning worker. The council will consider the new plan as 
soon as Monday's special meeting, scheduled for 4 p.m. 
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MAP posted-by: Richard Lake