Colorado Schools Win Marijuana Taxes

Colorado Schools Win Marijuana Taxes

Fort Collins has become quite the place for marijuana as dispensaries sold more than $34.3 million worth of marijuana in 2016, but how does that affect marijuana taxes?

Tax revenue has been added for schools in Colorado as a selling point of legalizing recreational marijuana in Colorado, so one might be wondering how those sales benefit their schools. 

RELATED: Writing Off Medical Marijuana is Totally Legit, According to The Game

Whether you’re hoping your latest joint or edible helped local students or are just wondering why schools are crying foul on state funding when marijuana taxes are on the table, here are five things to know about how marijuana taxes trickle down to education.

We have marijuana money. Why are schools still complaining about limited funding? 

Sales tax on retail marijuana doesn’t significantly boost overall per-pupil funding for Colorado schools statewide. Most funds are funneled through grant programs that districts have to apply for in hopes of extra funding for specific projects and programs. Marijuana revenue represents about 1 percent of the state’s total education budget, according to Colorado Department of Education.

How does it work? 

When voters approved retail marijuana sales, which began in January 2014, they approved a 28 percent sales tax on those products. That 28 percent includes a 15 percent excise tax to benefit K-12 public education in Colorado, a 2.9 percent state sales tax and a 10 percent special sales tax.

Where does that money go?

The first $40 million of marijuana revenue dedicated to schools goes to the Building Excellent Schools Today (BEST) Public School Capital Construction Assistance Fund — 12.5 percent of which is put in a sub-account for charter school facility assistance. BEST allocates funds through grants for construction. Priorities for those dollars include health, safety and security issues (think asbestos removal), new roofs, building code violations and poor indoor air quality. School districts typically have to match BEST funds with local district money.

Anything the excise tax generates beyond $40 million goes to the public school fund for K-12 education, though voters did approve a one-time $40 million boost for BEST in 2015-16, bringing total marijuana funds for the program that school year to $80 million. The public school fund received $5.7 million in marijuana taxes this school year and none last school year.

Schools can also apply for grants available through the Marijuana Tax Cash Fund, including grants for school health professionals, intervention and prevention services and substance abuse programs. The Marijuana Tax Cash Fund is funded by the other sales taxes on retail marijuana revenue, not the tax for K-12 education.

RELATED: Medical Marijuana Stores Refused on Tax Breaks 

Has Poudre School District seen any of this? 

PSD has received nearly $1 million in retail marijuana tax-funded grants in the past three years. None of that funding came from the BEST program, though PSD did apply in 2016 for $309,000 to fund fire alarm replacements at district schools. The application was denied.

Here’s what the district has successfully applied for and received:

  • $179,909 from the CDE School Health Professionals Grant Program for substance abuse prevention in the 2014-15 and 2015-16 school years
  • $309,798 for dropout prevention and student re-engagement programs at high schools in 2015-16 and 2016-17
  • $437,824 over 2.5 years (beginning this year) to fund programs and part-time counselors focused on bullying prevention at Blevins, Lesher, Preston and Wellington middle schools

What about the rest of the state?

Since 2015, Colorado Department of Education received $140.5 million through marijuana revenue — $86.3 million in 2015-16 and $54.2 million in 2016-17. That’s compared to total state education funding of $5.3 billion in 2015-16 and $5.4 billion in 2016-17.

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Information compiled from Colorado Department of Education, Poudre School Districtand Coloradoan archives

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