Pubdate: Fri, 25 Apr 2014
Source: Arkansas Democrat-Gazette (Little Rock, AR)
Copyright: 2014 Arkansas Democrat-Gazette, Inc.
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Details: http://www.mapinc.org/media/25
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Author: Kristen Wyatt, the Associated Press
Page: 2A

IN COLORADO PLAN, U.S. MATCHES 'POT' TAX

DENVER (AP) - The federal government has reluctantly agreed to let
Colorado be the first state to collect taxes from the legal sale of
recreational marijuana, but the U.S. also made clear it doesn't agree
with the move and may try to stop it if it isn't tightly controlled.

Instead of keeping a low profile with the money, however, some
Colorado lawmakers are trying the bold move of using millions of
dollars they've collected so far from marijuana sales to seek matching
funds from the federal government to keep kids off drugs.

The plan calls for transferring $3.5 million from the state's
marijuana cash fund to its general fund and then sending the same
amount to a state department that would apply for a federal match.

Democratic state Sen. Pat Steadman, the measure's sponsor, joked that
the bookkeeping move "is what I'm calling money laundering."

Supporters said the transfer shouldn't raise any concerns since
federal authorities already collect marijuana dollars from the state's
medical marijuana industry and have established guidelines for
recreational sales that include keeping the drug away from children
and off federal lands.

Moving the money from one fund to another, proponents said, simply
acknowledges and avoids potential conflict.

Colorado just needs to do "a little two-step" to calm federal nerves,
Steadman said, explaining the plan to fellow budget writers. "We
wouldn't want the tainted money to draw a federal match, now would
we?" he added.

But not all lawmakers look favorably at the plan.

"Colorado is now becoming basically a cartel, a drug cartel," said
Sen. Kent Lambert, a Republican on the budget-writing committee, who
nonetheless voted in favor.

"I don't know what they're trying to do," Lambert said. "Avoid federal
scrutiny? I don't think you're going to hide it from the federal
government."

The match request would seek funds from the U.S. Centers for Medicare
& Medicaid Services "for behavioral health community programs for
school-based prevention" of child drug use.

Federal Medicaid authorities would have to approve the idea, but it's
not immediately clear how the agency would respond. A spokesman
declined to comment Thursday.

The idea of sending marijuana revenue to the state's general fund
isn't new. Colorado has for years put a 2.9 percent sales tax on
medical marijuana, with the revenue going to the general fund, which
routinely sends money along to federal accounts.

But the recreational sales industry has created enough cash that
lawmakers for the first time will be able to seek a dollar-for-dollar
match of marijuana money with federal money.

In Washington state, where retail sales haven't yet begun, voters
assigned a new dedicated marijuana fund to receive taxes and spend the
money on health care, drug abuse treatment and education, and
marijuana-related research. It's too soon to say whether Washington
lawmakers would seek federal matching funds for any of those efforts
in the future.

A spokesman for the Colorado department that would seek Medicaid
funding insisted that the request to federal authorities will be from
general fund dollars.

"None of our programs seek funding from marijuana revenues," Marc
Williams said in an email.

Williams added that the prevention grants "would likely give
preference to those programs operating in school districts or areas
where there are a larger number of young, Medicaid-eligible clients."

Steadman predicted the federal government would agree to the
match.

"As long as it is an eligible benefit within the Medicaid program and
we're investing state dollars to expand benefits or expand the scope
of our program, that's eligible for a federal match," Steadman said
this week.

"And apparently we should be doing that with general fund dollars, not
marijuana tax fund dollars, although in my estimation, all of those
dollars are the same shade of green," he said.

The U.S. Department of Justice said in a memo to the states last
August that in order to avoid a crackdown on marijuana laws that flout
the federal ban, certain conditions must be met. At the top of the
list was keeping the drug away from youths.

Colorado legalized marijuana for all adults over 21 in 2012, though
tax collections didn't start perking up until January, when retail
sales began. Projections vary, but legislative budget-writers have
projected marijuana taxes and fees will bring Colorado at least $67
million for the fiscal year that begins in July.

The budget proposal, which includes a total of $31.4 million in
marijuana spending, now faces debate from the full
Legislature.

Republican Rep. Cheri Gerou predicted a fight. "We're going to be
picked apart, once this thing becomes public," she said.
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MAP posted-by: Matt