Adams County considers different approach for pot levy

Low-income scholarships still aim of 3 percent sales tax

Posted 8/28/17

Adams County officials may soon be approaching municipalities about working in partnership on collecting a marijuana sales tax to benefit low-income students, according to a spokesman.

Jim Siedlecki, director of communications for Adams County, …

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Adams County considers different approach for pot levy

Low-income scholarships still aim of 3 percent sales tax

Posted

Adams County officials may soon be approaching municipalities about working in partnership on collecting a marijuana sales tax to benefit low-income students, according to a spokesman.

Jim Siedlecki, director of communications for Adams County, said the court’s recent decision to not allow the county to levy a sales tax on marijuana sales within municipalities is going to significantly reduce a scholarship fund.

In 2014, Adams County voters approved a 3 percent sales tax on recreational marijuana sales. However, Northglenn, Aurora and Commerce City filed suit, arguing the county did not have authority to do so in those cities.

On June 19, the Colorado Supreme Court declined to take up the case, leaving the Colorado Court of Appeals ruling in place that the county couldn’t impose the tax within municipalities. That decision came in December 2016.

Adams county collected about $500,000 each year for two years from that sales tax, and with the help of state matching funds awarded $2 million to 121 different students, according to Siedlecki.

Siedlecki said to receive the matching funds from the state, the revenue source had to be new.

“They didn’t want to take away from another service,” Siedlecki said.

Four-year scholarships

To qualify, students must be on the free or reduced-priced lunch program, Pell Grant eligible, a U.S. citizen, and enrolled in a public institution in Colorado, according to Chuck Gross, executive director of Adams County Education Consortium.

Adams County turns the sales tax money and matching funds over to ACEC to administer the grants. Gross said each school district is allotted an amount based on the number of the students in the free or reduced-price lunch program.

“Each scholarship is intended to be a four-year scholarship,” Gross said.

He said scholarships range from $1,500 to $5,000 per year.

“I think it’s a great opportunity for these students,” Gross said. “It breaks down a lot of barriers for them.”

But Adams County officials are worried about how much will be available for scholarships in the future.

“It may not be as substantial of a number,” Siedlecki said.

There are about 20 recreational marijuana dispensaries in cities that are fully in Adams County — Commerce City, Federal Heights, Northglenn and Thornton, according to the Colorado Department of Revenue’s Marijuana Enforcement Division. Of the five cities partially in Adams County — Westminster, Arvada, Brighton, Strasburg and Aurora — only Aurora has recreational dispensaries, with about two dozen, including areas outside of the county.

By statute, Adams County allows only three dispensaries in unincorporated areas of the county, Siedlecki said. He said there has not been any discussion about allowing more dispensaries in unincorporated areas — where the county could add the 3 percent sales tax. Though he didn’t have any revenue projections, Siedlecki said removing about two dozen dispensaries in the incorporated cities from the county’s sales tax collection will hurt the scholarship fund significantly.

‘Competitive disadvantage’

“It’s safe to say at least half the revenue was coming from this fund in municipalities,” Siedlecki said.

But the cities didn’t want the tax.

In the suit, the cities argued that an additional county tax put recreational marijuana retailers in their cities at a competitive disadvantage compared to those in other counties. Northglenn currently charges a 4 percent sales tax for all retail sales and an additional 2 percent sales tax on marijuana and related products.

Northglenn City Manager James Hayes said in a written statement in June that the Court of Appeals’ decision supported municipal government and local businesses and he had been confident since the county’s sales tax was approved that Adams County didn’t have the authority to impose it.

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