When Colorado and Washington voted to legalize marijuana for recreational use, supporters touted new tax revenue estimates that ranged as high as $2 billion over five years. Recent reports and analyses offer some advice: Don't spend that money yet, reports Stateline. “Nobody has any idea (about revenue),” said Jeffrey Miron, a Harvard economist and analyst at the libertarian Cato Institute. “There's only one good way to find out what the revenue would be, and that would be for all levels of government to legalize it and then we see what happens.”
The Colorado Center on Law and Policy predicted that marijuana legalization there would produce $60 million annually in new revenue and savings for the state each year until 2017. The taxes on marijuana sales include a 15 percent excise tax (dedicated to school construction) and a 10 percent sales tax, for a total of 25 percent. According to the study, those levies would bring in $32 million for the state budget, $14 million for local governments and would result in a savings of more than $12 million in state and local law enforcement spending. Last week, Colorado lawmakers approved the taxes and set other regulations. Gov. John Hickenlooper, a Democrat, is expected to sign the bill. The taxes go before the voters in a November referendum.