MARIJUANA TAXES ADD TO STATE'S POT MESS

One of the biggest pitfalls of Proposition 19, the ballot measure to
legalize the recreational use of marijuana in California, is that it
does not set statewide standards on taxation and regulation, but
gives local governments far too much leeway.

So some cities see a golden opportunity to replenish their coffers,
and are going to voters on Nov. 2 with tax measures.

But a hodgepodge of taxes on marijuana is not the right way to find
new revenue and proposals to tax marijuana used for medical purposes
are even more objectionable.

In Sacramento, Measure C if voters approve Proposition 19 and the
city allows recreational marijuana shops to open would let the city
tax the businesses at up to 10 percent of gross revenue starting next
July 1. (The city plans to start at 5 percent, but wants the
flexibility to raise the rate without going back to voters for permission.)

Whether Proposition 19 passes or not, Measure C would also authorize
the city to tax medical marijuana dispensaries starting next July at
up to 4 percent of gross sales, though the city initially plans a 2
percent rate. The tax is expected to raise $300,000 to $500,000 a
year for the general fund. Now, dispensaries are taxed like any other
business, $30 to $5,000 a year, based on sales.

On a parallel track, the city is working on regulations for the
dispensaries, including limiting their size and keeping them away
from parks, schools, day care centers and churches.

Marijuana purveyors not city taxpayers should foot the bill for
adequate oversight, including code enforcement and police patrols.
But those costs will, or can, be covered by permit fees. The tax is
meant to generate revenue for a city seeking to shore up its finances
after three years of budget cuts.

Despite the lower tax rate for medicinal marijuana, we're sympathetic
to patients and their advocates who say that it's unfair to impose
another levy, on top of the 8.75 percent sales tax in Sacramento, on
what is supposed to be a medicine. We share their concerns that the
additional cost will almost certainly be passed on to customers, and
it would be a hardship, particularly for those on fixed incomes.

That's an even bigger concern in Rancho Cordova, which has taken a
hard line on pot, banning medical dispensaries so far, and which
wants to squeeze even more tax revenue from any pot businesses it
allows to open.

Measure H, which would take effect only if Proposition 19 passes,
would tax any nonprofit dispensaries at $100 per square foot; it
would tax any for-profit pot stores at between 12 percent to 15
percent of gross sales.

Measure O is even more unreasonable. It would go into effect whether
Proposition 19 passes or not, but would have much more impact if it
does. It would require those growing marijuana indoors to pay $600
per square foot up to 25 square feet ($15,000 a year for the
25-square-foot plot authorized by Proposition 19) and $900 a square
foot for a larger space.

By making no distinction between those growing marijuana for
medicinal or recreational use, the measure seems punitive. Cities
should not be in the business of profiting from patients legitimately
trying to ease their pain.