OAKLAND COUNCIL OPTS FOR TIERED MEDICAL POT TAX INCREASE

The City Council has made it more likely that Oakland residents will
see tax increases on everything from telephones to medicinal pot.

Despite sharp criticism for their financial stewardship, council
members are poised to give their blessing to several measures aimed
at boosting revenue to the cash-strapped city, which could face a $50
million budget gap next year.

But they stopped short of voting to put the measures, some of which
were reworked during the special City Council meeting, on the November ballot.

A public safety parcel tax of up to $360 a year on single-family
homes could net Oakland the largest increase of any of the taxes
proposed - $25 million the first year and $51 million the next year.

But the majority of attention at Thursday's special meeting revolved
around an increase of the city's medical marijuana business tax.

After two hours of public comments and council deliberation, council
members decided to table a proposal that could have brought in $28
million. Instead they opted for a tiered tax rate based on a
last-minute proposal by at-large Councilmember Rebecca Kaplan.

The new plan includes a 2.5 percent tax on dispensaries, putting it
in line with Berkeley if voters approve the rate in November.
Oakland's tax would be as much as 8 percent on cultivators, allowing
the city to capitalize on new rules allowing large-scale pot
cultivation approved by the council just days ago.

The city also would levy up to a 10 percent tax rate on facilities
that sell marijuana for recreational use if California voters pass a
statewide initiative to legalize marijuana in November.

The rate increases would not be retroactive.

Kaplan justified the different rates, saying other industries are
taxed differently based on whether they are retail or
production-related. The original plan - an increase of up to 12
percent - faced hot opposition from moderate-sized dispensary
operators and growers.

Steve Deangelo, executive director of Harborbay Health Center, the
largest dispensary in California, warned that the plan would force
Oakland dispensaries and growers to close down, taking potential
revenue with them.

But he refused to reveal how much the nonprofit dispensary pays the
highest-earning worker. The council will consider the new plan as
soon as Monday's special meeting, scheduled for 4 p.m.