Marijuana tax gives governor a break on budget

Without Proposition AA, little money would have been available to regulate pot

DENVER – Tuesday’s election brought a sigh of frustration and a sigh of relief from Gov. John Hickenlooper and his Cabinet.

The frustration came from the crushing loss of an income tax increase for public schools.

The relief came from voters’ approval of marijuana taxes.

Hickenlooper presented his 2014-15 budget to the Legislature on Thursday, and he said he didn’t rely on either tax passing. But without Proposition AA’s marijuana taxes, little money would have been available to regulate pot.

“We would have had a bare-bones regulatory environment that would not have made anyone proud,” Hickenlooper said.

With the taxes, the state will be able to be as strict with marijuana as it is with alcohol, he said.

“Every single plant will be tracked from seed to harvest,” he said. “I think it’s going to be a very robust program.”

State administrators have made that promise before.

But an audit found the state’s so-called seed-to-sale tracking system for medical marijuana failed to launch. Hickenlooper is counting on better funding to fix the problems for recreational pot inspections.

Hickenlooper wants to use extra money left over from medical marijuana licenses to pay for public health research. But Sen. Pat Steadman, D-Denver, warned that the constitution’s amendment on medical marijuana might not allow that. Steadman thinks it would allow research into the possible medical benefits of marijuana.

“There’s been a grand conspiracy to prevent that,” Steadman said. “Somebody needs to step up and start shining some light into these dark corners of neglected medical research.”

Even with the failure of Amendment 66’s income tax hike for schools, the public school budget will rise slightly.

The governor’s budget increases school funding by $223 per student. But the increase would have to be $1,200 per student to recover from cuts during the recession and keep pace with inflation, Hickenlooper said.

The budget earned mostly praise from Sen. Kent Lambert, R-Colorado Springs, the JBC’s biggest fiscal hawk.

Lambert liked Hickenlooper’s plan to raise the state reserve to 6.5 percent.

It was 2 percent just a few years ago – enough to keep the government open for only seven days.

Hickenlooper said it’s crucial to build a bigger rainy-day fund.

“And lord knows we’ve had our share of fire and rainy days,” Hickenlooper said.

The Legislature will debate the budget starting in January and pass it next spring.