Up in smoke: A modest proposal to produce highway money | Arkansas Blog

Saturday, October 10, 2015

Up in smoke: A modest proposal to produce highway money

Posted By on Sat, Oct 10, 2015 at 8:04 AM

click to enlarge REEFER GLADNESS: Oregonians celebrate legal pot sales. - TWITTER/HUFFINGTON POST
  • Twitter/Huffington Post
  • REEFER GLADNESS: Oregonians celebrate legal pot sales.

Everybody wants better highways. Nobody wants to pay for them. User fees (gas taxes) have been ruled out of bounds by most in the controlling Republican legislative bloc.

So, short of a magic act, where do you get money without raising taxes unless you take away services from schools, prisons, police or — the most popular idea — poor people.

How about introducing a new taxable commodity?

Oregon has legalized recreational marijuana. It had a strong medicinal marijuana structure in place so sales have immediately gone gangbusters — $11 million in sales in five days, or more than $2 million a day.

If that number holds, you're talking $730 million a year. At the base Arkansas sales tax rate of 6 percent, you're talking $43 million in new state revenue. But no "sin" product would get off so easily. We charge $1.15 in excise tax in Arkansas per pack of cigarettes, a commodity that can vary widely in cost but which averages around $6 a pack, or almost a 20 percent tax rate.

20 percent of $730 million is $146 million.

That would buy a lot of asphalt.

(I know. Oregon has about a third more people than Arkansas. And Arkansas, being the God-fearing state full of law-abiding citizens that it is, marijuana sales might be about as robust as lottery sales have been. Still, I think you could sell a few more lids than are already being consumed in Arkansas if it was legal. Do you? Plus, it would be an enormous benefit to sick people who get relief from marijuana.)

PS: In response to comments: No, highways wouldn't be my priority for new money. But it seems to be the only one of any interest out at the Capitol currently.

 

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