By Gretchen Schuldt
Legalizing marijuana could bring the state an additional $138 million per year in tax revenue beginning in 2021, according to the State Department of Revenue.
That may be low, though -- the department estimates that Wisconsinites would buy just 55% of the volume purchased in Colorado.
The department estimated the impact of legalizing marijuana as proposed in a bill introduced by State Rep Melissa Sargent (D-Madison) and State Sen. LaTonya Johnson (D-Milwaukee). The bill would legalize the sale and use of pot for recreational and medical purposes.
“Even by conservative estimates, my bill to legalize marijuana will be an economic boon for Wisconsin," Sargent said Tuesday. "It's not just about legalizing marijuana; it’s about legalizing opportunity. This bill will create new jobs, support local economies, and present a return on investment per dollar that’s unparalleled in other industries. The numbers support legalization and given the budget crisis we’re facing, it’s time for us to give legalizing marijuana serious consideration.”
Somewhat less money would be generated in the bill's first years, according to the fiscal estimate. "Sales of marijuana would increase state excise and sales tax and fee revenues by $60.5 million in FY19, $109.5 million in FY20, and $138 million in FY21," the department reported.
The department assumed that Wisconsin marijuana consumption patterns would be similar to those in Colorado, where excise tax collections rose from $41.7 million in 2014 to $89 million in 2015, and $143.2 million in 2016.
Overall, though, Wisconsin pot users would buy just 55% of the amount of marijuana sold in Colorado, the department said. DOR didn't explain its reasoning, saying only that the estimate is "based on information from the U.S. Substance Abuse and Mental Health Services Administration and the U.S. Census Bureau regarding marijuana usage rates and population differences."
Wisconsin's estimated population is actually a tad larger than Colorado's - 5.8 million here compared to 5.5 million in Colorado, according to the U.S. Census Bureau.
New legalization costs in Wisconsin would be fairly minimal in comparison to revenue, according to the estimate - a one-time expenditure of $345,980 for setting up processes and systems for the new tax, another $156,360 annually in related administrative costs, and $1.2 million for 10 new excise tax agents, a supervisor and one criminal investigator.
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