Skip to main content

Where school building plans are going up in smoke

Hopes for windfall from taxes on cannabis are stubbed out

Hopes for windfall from taxes on cannabis are stubbed out

When the US state of Colorado unveiled controversial plans to legalise cannabis, it offered an unusual sweetener to appease its critics. Millions of dollars raised through the radical move would be used to fund new buildings for the state's primary schools, policymakers claimed.

But while politicians pledged that schools would benefit to the tune of $40 million (pound;26.6 million) each year from taxes levied on sales of the drug, new research suggests they have made a hash of their sums. Revenues have ended up being millions lower than expected, because many buyers have continued to purchase the cheaper marijuana available through illicit means, instead of the taxed varieties on sale in official dispensaries.

The state also severely underestimated the cost of new school buildings, according to academics from the University of North Carolina at Chapel Hill. "Even if we were to have the full $40 million, that's not a great deal of money," a Colorado school superintendent told the researchers. "To put it into perspective, that's about what it would cost to build a big middle school."

"The amount of funding provided.for in legislation is minuscule compared with current spending on school construction and on projected future school construction needs," the researchers conclude.

The challenge is made harder by a perception that the new source of taxes has solved the problem. "People believe that the facilities problem in Colorado has been fixed by this, and it hasn't," a Colorado children's charity director said.

The academics presented their study on cannabis legalisation to the annual American Educational Research Association conference, held in Chicago this week.

The research reveals that, in 2014, the total amount raised for primary-school construction work through the new cannabis tax was only $13.3 million - just a third of the predicted sum. The figure is expected to rise to $20.4 million this year, still barely half the amount anticipated. "Future annual contributions.will fall short of the $40 million threshold established in legislation," the academics add.

The issue has been exacerbated by funding from the regional lottery - previously a major source of finance for school building projects - being halved in anticipation of a windfall from cannabis sales.

Slow on the draw

It has been legal to sell recreational marijuana in Colorado since 1 January 2014. But legal drugs tend to command very high taxes, and recreational cannabis in the state is taxed at a level between 25 and 30 per cent higher than medical marijuana. It seems that regular highs have not addled users' brains to the extent that they are oblivious to the price hike.

As a result, plans to legalise all drug sales have largely gone to pot. "Recreational users are.participating in a grey market for medical marijuana," the academics note. Taxes raised through the sale of medical marijuana are not included in the funds earmarked for primary schools.

Some users, too, have simply continued to follow old habits. "The price of marijuana on the black market is lower, because of the lack of taxes," the academics say. "And, with recreational use decriminalised, black-market buyers lack incentives to enter the legal market."

The researchers therefore conclude by suggesting that politicians and lawmakers endeavour "to expand their understanding of the policymaking process, particularly with regards to policies that address issues of school finance".

The view from school leaders in the UK is similarly scathing. "US politicians seem to have a track record of connecting school funding to inappropriate factors," said Russell Hobby, general secretary of the NAHT headteachers' union. "Only a dope would think this latest version was a clever idea."

Log in or register for FREE to continue reading.

It only takes a moment and you'll get access to more news, plus courses, jobs and teaching resources tailored to you