State pot taxes dribble in for a handful of Colorado Springs area school districts


The first cut of Colorado's excise tax on wholesale recreational marijuana has been thrown into this fiscal year's pool of cash grants for capital improvements at public schools.

Three local projects are among the 26 statewide that are receiving funding.

Another three area school districts and a charter school will get a check in the mail next week from a $2.28 million appropriation from state marijuana sales taxes to pay for behavioral health counseling and drug prevention education.

But many districts say they have little hope of seeing any of the collections.

"Wherever I go, it's the No. 1 comment I hear, 'When I voted for pot, I thought I was helping schools.' They don't realize how small a drop in the bucket it is and how hard we have to compete for it," said Glenn Gustafson, deputy superintendent and chief financial officer for Colorado Springs School District 11.

Colorado voters approved recreational marijuana production and sales in 2012 and its tax system in 2013.

Wholesale marijuana growers pay a 15 percent excise tax on sales to retailers.

Recreational cannabis buyers are charged a 10 percent state marijuana tax, a 2.9 percent state sales tax, plus local sales and use taxes.

The two shops in Manitou Springs, the only recreational retail stores in El Paso County, charge a total of 24.3 percent in taxes on purchases.

Some people mistakenly think that Manitou Springs School District 14 is receiving part of the tax revenues, said Tim Miller, assistant superintendent.

Not so. Taxes collected on marijuana sales go to the city, county and state, not the school district.

However, Colorado law stipulates that the first $40 million of the 15 percent excise tax be used annually for public school capital improvements, administered through the state Department of Education's Building Excellent Schools Today, or BEST, grant program.

"Although this is certainly a lot of money, it does not go far for construction," Miller said, citing as an example a local project that got underway earlier this year in a nearby school district. Cheyenne Mountain School District 12 is expanding and upgrading its high school campus at a cost of $42.5 million. Voters approved a bond issue last November to pay for it.

"That's just for one school," Miller said, "and $40 million is the amount available for the entire 178 school districts in the state."

The excise tax collections have not reached $40 million. In 2013, the first year of retail sales, collections were $3 million, and last year they came in at $23 million, said Scott Newell, director of the state education department's division of capital construction.

Some of that has been added to the 2015-2016 fiscal year BEST grants fund, which in May awarded 26 grants totaling $47.6 million.

Newell said this is the first year for taxes from marijuana sales to be incorporated into the fund, which also receives money from Powerball profits and State Land Trust funds. The latter generates up to 90 percent of the program's funding. Marijuana taxes account for less than 1 percent of the pot.

The three local projects that received BEST funding for this fiscal year are: replacing the roof on the school building in Calhan School District RJ-1, renovating and expanding the junior/senior high school at Edison School District 54-JT, and middle school health and safety upgrades in Harrison School District 2.

Another three districts - Cripple Creek-Victor School District RE-1, Fountain-Fort Carson School District 8 and Manitou Springs D-14, along with Atlas Preparatory in Harrison School District 2 - this week will receive money to hire nurses, psychologists, social workers and counselors to address behavioral health and substance abuse in their schools. A total of 20 districts and schools statewide were awarded grants this year.

Like other district leaders, Linda Miller, superintendent of Calhan RJ-1, said the marijuana tax proceeds for school improvements are relatively small.

"This marijuana tax benefits those districts fortunate enough to be awarded a BEST grant," she said. "However, when we talk about all the cuts in education over the last few years, it's a drop in the bucket."

Colorado lawmakers slashed state funding for education during the recession and allocated some of the money that had been earmarked as operating revenue for school districts to other entities, reaching a high of $1 billion shaved off state funding for education in the 2013-2014 school year.

Since taxes from legalized recreational marijuana are targeted for capital needs, "There's no ability to use such monies in a school district's general fund to support educational program delivery," said Matt Meister, spokesman for Falcon School District 49.

D-11's Gustafson said BEST grants have criteria that further restrict districts' abilities to obtain the funds, including that the school must provide a portion of matching funds for the proposed project - anywhere from 5 percent to 80 percent - and that the wealth of assessed property valuation in the school district is a factor.

"Districts getting BEST grants usually are in fairly high-poverty areas," Gustafson said, "and they are related to health and safety, such as asbestos removal or security improvements. Our chances are pretty slim we're going to see any of that money for a while."

Meister also doesn't expect Falcon D-49 to benefit.

"To this point, there has been literally no impact to District 49 from recreational marijuana tax receipts," he said, "and it is likely that it never will have an impact in our district under the current system."

Meister also agreed that the BEST program is "skewed heavily" toward rural and high-poverty school districts.

"The BEST program has a lot of subjectivity to its awards that enable that pattern," he said.

Newell said the program, set up under Colorado law, is open to all public school districts, schools, charter schools, BOCES groups and the Colorado School for the Deaf and the Blind.

Roof replacements, mechanical upgrades, security projects and new construction have been among the most popular projects, he said.

The program used to help finance school construction projects through bonds but reached its cap of being able to do that, so two years ago switched to awarding cash grants.

Since BEST started in 2008, 40 projects in El Paso County have been funded at a total cost of $128 million, Newell said, of which $95 million came from BEST and the remainder from the schools.

Even though about half of the schools in Fountain-Fort Carson School District 8 are on federal land, on Fort Carson property, like others, the district is eligible to apply for BEST funding.

Marijuana production and sales for medical or recreational use remain illegal under federal law, although numerous states have approved legalized sales.

D-8 received one BEST grant seven years ago to help build Weikel Elementary School on Fort Carson.

Ty Valentine, D-8 spokesman, said the district has not pursued other BEST grants since then and doesn't anticipate doing so in the next five years and possibly beyond.

"In the event that a situation would lead us to seek capital construction funds again in the future, we would re-evaluate the BEST program and other options at that time," he said.

Valentine added that the district's decision to not go after BEST monies now has "nothing to do with the marijuana taxation."

Confusion about recreational marijuana's benefits to public schools remains on all fronts, Newell said.

"We get a lot of questions from citizens, asking if they shop in a certain area can they say they're helping (schools) there, and on the opposite side, school districts say we don't have recreational marijuana allowed in our municipality, can we still apply (for BEST grants)," he said.

"We've had to learn a lot about it, and at the end of the day, it's like any other state revenue that goes for state projects."

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