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Astoria sitting on pot money

City silent on tax revenue until state rules catch up
By Katie Frankowicz

The Daily Astorian

Published on September 22, 2017 12:01AM

Last changed on September 22, 2017 7:26AM

Only Astoria’s finance director knows how much money has come in so far from a local tax on recreational marijuana sales.

Danny Miller/The Daily Astorian

Only Astoria’s finance director knows how much money has come in so far from a local tax on recreational marijuana sales.

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There is money sitting in Astoria’s coffers that City Finance Director Susan Brooks can’t talk about.

The payments represent the first installment of a local 3 percent tax on the sale of recreational marijuana, but the revenue doesn’t appear on budget documents and no one else at City Hall knows how much has come in. Brooks, like others across the state, had to sign a confidentiality agreement when Astoria asked the Oregon Department of Revenue to collect the tax on the city’s behalf.

Meanwhile, Coos Bay, operating under a similar confidentiality agreement, included an amount in its monthly financial report — though, like some other tax revenue the city collects, the local marijuana tax money was not singled out by name, Coos Bay Finance Director Suzanne Baker said.

The different approaches are an example of how state marijuana rules and the interpretation of those rules are still catching up to the drug’s legalization, even as recreational pot stores in Oregon have become as familiar as gas stations.

“It’s a statewide question of what we can disclose and what we cannot,” said Wendy Johnson, intergovernmental relations associate with the League of Oregon Cities. At the same time, she added, cities must comply with local budget requirements to account for all incoming money.

“We just need some clarity,” she said.

Johnson expects clarity could arrive next week in the form of a legal opinion from the state Department of Justice, requested by the Department of Revenue.

Not all of Oregon’s cities and counties passed local taxes, but most of those that did signed agreements with the Department of Revenue for collection.

With these kinds of taxes there is usually a regional breakdown, explained Joy Krawczyk, a spokeswoman for the Department of Revenue. The department required confidentiality agreements with the cities it collects local marijuana taxes for in order to protect information about individual tax returns.

If a city with multiple pot shops is also located inside a region with just a handful of shops, “you can back into those amounts” if the city releases its own revenue numbers, Krawczyk said.

In some ways, the situation is similar to what Astoria sees when the city receives its portion of state liquor tax revenue, Brooks said. “We don’t necessarily get a blow-by-blow of ‘XYZ liquor store reported …’”

Still, the agreement is fuzzy in terms of what can be disclosed, and to who, Johnson said.

“For cities that have an agreement (with the Department of Revenue), one, it’s a bit unclear,” she said, “and, two, it will vary in application because of the size of the city and the number of shops.”

“It’s new, and it’s developing after the fact,” said Brooks.

Johnson said no one really knows what annual revenue from the local marijuana tax and shared portions of the state tax will look like, and the amount will likely fluctuate. Each quarter, cities will have to confirm that they allow the sale of recreational marijuana and marijuana products within their city limits. As different cities change direction, the shared tax revenue will only go to cities that still allow pot sales.

The League of Oregon Cities had advised cities to “budget cautiously for the first year and a half because it was in such flux,” Johnson said.

Astoria didn’t include any marijuana tax revenue projections in its budget for this fiscal year at all.

“You’re always better off to not plan on spending resources you don’t know if you’re going to get or not,” Brooks said.

The local marijuana tax is a new revenue stream. “We don’t have this kind of history with this product, with these retailers,” she said.


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