Washington expects to rake in about $730 million from sales of legalized marijuana over the next two years.
While that may seem like a large sum, it amounts to just a small piece of the $41.3 billion in total revenues that are expected to bankroll the state’s general fund over the same period.
What’s more, without a change in law, only some of the state’s marijuana money is available for lawmakers to spend however they want, limiting its utility in dealing with budget challenges such as the state Supreme Court order to fix the way the state pays for schools.
More than 60 percent of the state’s marijuana money over the next two years is slated to go toward public health programs, including Medicaid, substance abuse prevention efforts and community health centers, according to the state Office of Financial Management.
Another $17 million will go to the Liquor and Cannabis Board, which is responsible for regulating the state’s legal marijuana market, while $30 million will be shared with local governments that allow marijuana sales within their limits.
The remaining money that freely flows into the state general fund — about $211 million — adds up to about half of 1 percent of the state’s projected operating budget for 2017-19.
The distribution of the state’s marijuana money roughly follows the blueprint set by Initiative 502, which Washington voters approved in 2012 to legalize recreational marijuana use for adults 21 and over.
Though one prominent GOP lawmaker, state Sen. Ann Rivers, has recently proposed dedicating all the state’s marijuana money to K-12 schools, other lawmakers said they are hesitant to step in and meddle with what voters originally approved.
“We can’t ignore public health or access to health care,” said House Majority Leader Pat Sullivan, D-Covington. “The initiative that passed dedicated that money to those causes.”
Rivers, R-La Center, said she didn’t support I-502 when it was on the ballot, but now that it’s the law, marijuana revenues could prove helpful given that the state is in contempt of court for not coming up with a plan to fully fund K-12 education in the McCleary case.
Having a dedicated revenue source that is projected to grow would help the state keep up with the costs of paying for teachers and other school employees, she said. Right now, local school districts are using local property tax levies to pay some of those costs, a practice the state Supreme Court has ruled unconstitutional.
Marijuana revenues are projected to grow by about $75 million between the state’s upcoming 2017-19 budget cycle and the next budget cycle, which runs from 2019-21.
“There are many of us who would like to know that this thing we weren’t fully comfortable with will be doing a very good thing, which is educating our youth,” said Rivers, who chairs the Senate Health Care Committee.
Rivers said the state has more marijuana revenue to work with than it might appear over the next two years because lawmakers could reroute a $356 million distribution that has been typically used to help cover the state’s share of Medicaid costs.
But others say using that money for education would only create a hole elsewhere in the state budget, forcing lawmakers to find other revenue to pay for health care and other programs.
“It’s a messaging technique, not a budgeting technique,” said state Rep. Timm Ormsby, D-Spokane, the House’s lead budget writer.
A school-funding plan from GOP Senate leaders would replace most local school district levies with a new statewide property tax to solve the McCleary problem, while adding another $1.4 billion in state funding on top of that. GOP leaders say they can find that money in the state’s existing budget without imposing other new taxes.
Democratic lawmakers, meanwhile, are proposing to raise about $1.6 billion to increase what the state pays to hire teachers and other school employees, and say new revenue sources will be needed to make that happen.
Neither plan would dedicate marijuana revenues to school funding, but Rivers said it is an idea she is “working on fleshing out” with her Republican colleagues who control the state Senate.
Sen. John Braun, R-Centralia and the Senate’s chief budget writer, said it would be very difficult politically to change the allocation of marijuana revenues. The topic was heavily negotiated in 2015, when Washington lawmakers approved a plan to merge the state’s medical and recreational marijuana markets, he said.
“It’s not like we can say, no, we’re not going to put some into research, we’re not going to put some to (local governments), we’re not going to put some toward prevention,” Braun said.
Even if lawmakers used all the state’s marijuana money for schools, that alone wouldn’t be enough to solve the McCleary problem, he said.
“Marijuana isn’t our solution to education funding,” Braun said. “It helps us build a stable and balanced budget, but it’s not a panacea that fixes all our problems.”