Pubdate: Sun, 01 Aug 2010 Source: Long Beach Press-Telegram (CA) Copyright: 2010 Los Angeles Newspaper Group Contact: http://www.presstelegram.com Details: http://www.mapinc.org/media/244 Author: Paul Eakins SHOULD LONG BEACH GET A CUT OF MARIJUANA SALES? Proposed tax could be placed before voters on the November ballot. LONG BEACH - If California voters choose to legalize recreational marijuana in November, any pot sold in Long Beach could be subject to a voter-approved city tax. The City Council is holding a hearing on a proposed marijuana tax Tuesday and could vote to place the tax on the November ballot. Regardless of the outcome of state Proposition 19, which would legalize marijuana, the city's existing medical marijuana collectives that just months ago were given strict new regulations would also be taxed under the ballot measure. The taxation of marijuana may draw the most controversy and debate, but it won't be alone on Long Beach's ballot. Three proposed City Charter amendment changes also may be added to the ballot if the council approves the measures Tuesday - a new transfer method that may increase how much money the Port of Long Beach gives the city, the elimination of the Civil Service Department and increased hiring preferences for veterans. According to the Los Angeles County Registrar-Recorder, the estimated cost for Long Beach's first ballot measure would be $362,000, rising by $48,000 or $49,000 per additional measure, topping out at $557,000 for five ballot measures. If the council places the four proposed measures on the ballot, the cost would be $508,000. The vast majority of the council has supported every measure, but a single vote of dissent on the marijuana tax could doom that proposal. In order for the council to have a ballot measure that requires just more than 50 percent voter approval, the council must unanimously declare a fiscal emergency. Otherwise, the marijuana tax will require a two-thirds vote of approval, which is a tall order for any ballot measure. It appears the council won't get that unanimous fiscal emergency vote. When the council voted July 6 to have the city attorney draft the marijuana tax measure, 5th District Councilwoman Gerrie Schipske cast the lone vote of dissent. Although she couldn't be reached Friday for comment, her chief of staff, Josh Butler, said that Schipske "hasn't changed her position." At last month's meeting, Schipske explained her opposition: "I have great difficulty now taxing something that we have said is for medicinal purposes," Schipske said. Schipske used the power of her vote in a similar fashion in 2008, when she alone voted against declaring a fiscal emergency for the Measure I infrastructure parcel tax. The measure then required a two-thirds vote of the people, but failed to achieve it - although it did receive more than 50 percent. As with Measure I, the city is looking to the marijuana tax to bolster the city's coffers. Long Beach faces a projected $18.5 million general fund deficit in the coming year, and further budget shortfalls are expected at least through 2014. Under the proposed ballot measure, medical marijuana collectives would be taxed 5 percent of their gross receipts, recreational marijuana businesses would pay 10 percent of their gross receipts, and marijuana cultivation sites would pay $25 per square foot. A minimum $1,000 business license tax would be applied to all marijuana businesses. For medical marijuana collectives, these costs would be on top of a $14,742 permit fee that the council put in place in March. Operators of collectives say even that amount is excessive, and medical-marijuana advocates say that the drug shouldn't be taxed because it will only increase the cost for legitimate patients. Interestingly, when the council approved medical marijuana regulations, the city made it quite clear that the drug can't be sold and that collectives may only ask for donations from their members. So, how can you tax something that isn't sold? "Regardless of what they call it, if there is an exchange of goods or services, whether it's barter or for cash, it's for tax purposes a sale, even though under our ordinance you aren't supposed to make a profit on it," Deputy City Attorney Mike Mais said Friday. He pointed to other cities that are enacting similar marijuana taxes, such as Oakland, Sacramento and Berkeley. The marijuana tax is the second item on the agenda, while all of the other proposed ballot measures are scheduled for the end of the meeting. Tidelands transfer Another ballot measure that the council will consider Tuesday would change the City Charter to have the Port transfer up to 10 percent of its gross revenue, rather than the current method of 10 percent of its net operating revenue, to the city's Tidelands Fund. City officials say the change will eliminate confusion over the net transfer, which sometimes leads to disagreements about what costs should be factored in before the transfer is made. The change also has the potential to give the city at least a couple of million dollars more in the transfer. As is currently the policy, the Harbor Commission would still have the authority to give less money if it decides that the cash is needed for Port projects or other costs. Another part of the proposal would change the charter to clarify that the city has control of all oil operations in Long Beach, even those on land owned by the Port. Whether the Harbor Commission likes the ideas at all is another matter. When the commission meets today, it plans to discuss the charter amendment, but only a single sentence describes the discussion. Unusually, there is no recommendation from Port staff, nor a report explaining the repercussions of the measure. Noel Hacegaba, the commission's executive assistant, said a staff recommendation isn't expected and that it will be up to the commissioners to decide their stance. If the commission decides to oppose the measure, then that could spoil relations between City Hall and the Port of Long Beach, to which city officials have more frequently been looking for financial help. The commissioners may find themselves in an awkward position, because their first responsibility is to the Port, yet they are appointed by the council and the mayor. Civil Service consolidation As city officials look to cut costs and speed up Long Beach's hiring process, a ballot measure has been proposed that would eliminate the Civil Service Department from the City Charter. The department's responsibilities, such as testing and hiring employees, would be handled by the Human Resources Department. The Civil Service Commission, which sets rules and hears appeals of workplace violations, would continue to exist. Officials estimate that consolidating the departments would save $400,000 a year. Jobs for veterans While that measure would change who does the hiring, a ballot measure proposed by 1st District Councilman Robert Garcia might change who would be hired. Garcia's measure, which was unanimously supported by the council last week and is expected to pass Tuesday, would give veterans more credit in testing for city jobs. Veteran job applicants would still have to meet basic qualifications for positions, but they would be given extra points on tests to increase their chances of being hired. Aquarium expansion Ballot measures may be the most significant votes on Tuesday's agenda, but the council will start its meeting with a hearing and vote on changing the coastal zoning around the Aquarium of the Pacific to allow the Aquarium to expand. The 23,330-square-foot expansion will create a new, changing exhibit area with a variety of marine animals, and it will have a 3-D theater for educational programs. The aquarium will also get a new front entrance, a larger gift shop, more lobby space and a new facade that will have a digital screen on which images of sea life or the Aquarium logo may be displayed. The Planning Commission has already approved the expansion's design. The project is expected to cost $50 million, which would be paid through grants and donations, not city money. The California Coastal Commission also must approve the expansion. - --- MAP posted-by: Matt