Gov. Hickenlooper aims Colorado marijuana tax revenue toward affordable housing, homeless
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Colorado Gov. John Hickenlooper listens as Interior Secretary Sally Jewell announces that the federal government has canceled 25 leases for oil and gas wells on pristine federal land in Colorado during a news conference Thursday, Nov. 17, 2016, in the State Capitol in Denver. (David Zalubowski, AP file)

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A proposal by Gov. John Hickenlooper to direct marijuana revenue toward building affordable housing and curbing homelessness offers a glimpse into the potential the new revenue can have on public services and projects.

But Hickenlooper and his administration are hesitant to acknowledge that cannabis dollars can have a positive impact on expanding state programs. For now, the governor is adamant that the dollars should be spent only on issues related to marijuana.

To the chagrin of pro-marijuana activists, Hickenlooper believes there is a correlation between homelessness, a need for affordable housing and substance abuse, including impacts from marijuana legalization.

"We're trying to make sure that the (marijuana) tax revenue is to a large extent, if we're going to build affordable housing, is for people that had a drug problem. We're trying to use the revenues for unintended consequences of drug use, especially legalization of marijuana," Hickenlooper said.

The governor's budget request for the upcoming fiscal year includes $18.3 million for affordable housing, housing for those with behavioral health needs, and to address chronic homelessness. Of that, $16.3 million would come from marijuana taxes and the rest from the general fund.

The governor foresees $12.3 million for as many as 1,500 housing units for the homeless; $4 million for housing units paired with behavioral health services, and $2 million to assist seniors with finding affordable housing.

The Legislature still must approve the funding during the upcoming session that begins in January. It's likely that there will be disagreement from lawmakers on how to spend the new marijuana tax revenue.

The governor's budget director, Henry Sobanet, believes it is appropriate to direct marijuana money toward the governor's prescribed services.

"What we are guarding against, and what you don't see, is new programming unrelated to marijuana," Sobanet said. "Gov. Hickenlooper has been emphatic about he doesn't want ... constituents of programs to consume marijuana so that the programs can have money."

In other words, the governor's office doesn't want new or extended programs to be dependent on consumers purchasing marijuana.

State taxes on medical and recreational marijuana totaled $134 million in the first nine months of the year, according to the governor's budget office. The money is largely earmarked for enforcement, mental health and substance abuse programs.

Mason Tvert, a lead proponent of Amendment 64, which legalized recreational marijuana in 2012, said what he is seeing is the diversification of marijuana revenue spending at the state level.

"We never said that marijuana was going to raise enough money to solve every problem in Colorado," Tvert said.

"We simply said that marijuana should be taxed like other legal products that are regulated for adult use and that the money would be beneficial, and that's what's happening."

Someday, marijuana might fund a host of state programs, especially if earmarked revenue begins to trickle into the general fund, which would allow for a wide range of discretionary spending by lawmakers.

Shawn Coleman , a well-known cannabis lobbyist in Colorado, believes the governor is overstating the link between marijuana legalization and homelessness.

"The connection between the two is suspect at best," Coleman said, pointing out that there are a host of issues leading to homelessness in Colorado, including an inflated Denver housing market that has spiked as a result of a booming economy.

"If these revenues can be used for addressing affordable housing and homelessness, I think those are good uses for those funds. If we get to the right answer for the wrong reason, I suppose that's OK," Coleman said.

The Department of Local Affairs, which oversees the state's affordable housing program, said the marijuana revenue would allow it to leverage investments by the federal government and private construction sector.

"The vision is really one that we have been on for the past couple of years, and that is emphasizing a housing first model, that you want to provide housing for the chronic homeless and wrap the services around that housing once they are stable and secure," said Pat Coyle, deputy executive director of the Local Affairs Department.

"When someone who is living on the street, and the light bulb goes off to say, 'Okay, I'm motivated to change my life,' you want to be there when they're there," Coyle said. "To do that, you can't ask them to go stand in line."

In addition to directing marijuana revenue toward homelessness and affordable housing, the governor also has proposed a more direct use of the funds as it relates to legalization.

Hickenlooper requested $16 million partly for initiatives to control marijuana trade on the "gray market," in which people use legalization to grow large amounts of marijuana legally at home, but then sell the product illegally on the black market.

The $16 million also would include augmenting criminal justice diversion and supporting behavioral health services. The governor's office estimates that about $6 million would be applied to gray market enforcement.

Over time, it is expected that general spending of marijuana revenue will expand as the legalization "experiment" continues.

Some local jurisdictions have begun spending their separate marijuana taxes on new programs, including Pueblo County, which is spending cannabis dollars on college scholarships and community improvement projects.

"Colorado Springs is the second-largest potential (cannabis) market in the state, but because of the political viewpoint in that city, they're missing out on those projects," said Miles Light, an economist from the University of Colorado at Boulder, who pointed out that Colorado Springs prohibits retail marijuana.

Light is also a consultant with the Marijuana Policy Group, which advises on marijuana economics, finance and policy.

"Marijuana, it's like a sin tax, and so it resonates with the public when these sin taxes are used to create public good," Light continued. "I'm not surprised that marijuana taxes are used to try to curb homelessness and stop drug addiction. But over time, these earmarks, when they end, the funds may slowly creep into the general fund."

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