by J.D. Davidson
An independent, Columbus-based analysis group believes approving recreational marijuana would mean hundreds of millions of tax dollars for the state.
But a state senator thinks it’s not worth it.
Scioto Analysis released a cost-benefit analysis of the impact of Issue 2, a proposed constitutional amendment on the November ballot that would legalize recreational marijuana with a 10% tax on the sale.
The report showed a $260 million net benefit, with results ranging between $200 million in net costs and $1.9 billion in net benefits.
“Although there is a chance the costs outweigh the benefits, our simulation model suggests that in 90% of likely scenarios, recreational marijuana legalization will have a positive net economic benefit on society,” the report said.
State Sen. Mark Romachuk, R-Ontario, links the marijuana industry with Big Tobacco by maximizing profits by increasing addiction levels.
The Ohio Senate recently passed on a Republican-party line vote a resolution against Issue 2.
“The 10% tax the marijuana industry has written for itself would be one of the lowest in the country, with no money earmarked for the counties that administer the human services programs which will have to manage the increased abuse and addiction,” Romachuk (pictured above) wrote in a recent release. “Even worse, the marijuana industry wrote the law in such a way that it will get back as much as one-third of the taxes to fund new marijuana farms and shops. It would be a great deal for them, but it would be a rip-off for Ohioans.”
The proposed 10% tax is the same as Michigan and Illinois, plus any sale would include a 5.75% state tax and local taxes. According to the proposed amendment, the 10% tax would be earmarked for an equity and jobs program and the Substance Abuse Addiction Fund.
The Scioto Analysis report estimated $190 million in annual tax revenue and an $800 million social benefit from the two programs receiving tax revenues.
It said the “most significant cost” would be the lost productivity of workers in certain industries. Using past research, the report said states that legalized recreational marijuana experience reductions in productivity, amounting to roughly a 1% decrease per worker. In Ohio, the report said that will lead to about $760 million in lost productivity in the short run.
“The key reason benefits are likely to outweigh costs when it comes to marijuana legalization is how the tax dollars raised are going to be used,” said Michael Hartnett, a policy analyst. “The programs outlined in the ballot initiative have historically been very efficient ways to use public dollars and will likely generate a lot of value for Ohioans.”
Romachuck said he believes passage of Issue 2 would create problems on state roadways, safety issues for children, more crime and workplace issues.
“This creates challenges to maintaining safe workplaces, especially in industries that require high alertness and precision like Ohio’s manufacturing businesses,” Romachuck said. “These concerns have led the Ohio Chamber of Commerce, the Ohio Manufacturers Association and the Ohio Business Roundtable to oppose legalizing recreational marijuana.”
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An Ohio native, J.D. Davidson is a veteran journalist with more than 30 years of experience in newspapers in Ohio, Georgia, Alabama and Texas. He has served as a reporter, editor, managing editor and publisher. Davidson is a regional editor for The Center Square.
