The Latest: California scales back cannabis tax revenue
SACRAMENTO, Calif. (AP) — The Latest on California Gov. Gavin Newsom’s budget proposal (all times local):
California is paying a price for the shaky rollout of its legal marijuana market.
Budget documents released Thursday show the Newsom administration is scaling back what it expects to collect in cannabis tax revenue by $223 million through June 2020.
What that means is that slower-than-expected pot sales are gouging a hole in California’s budget.
Industry officials say most consumers continue to purchase pot in the illegal market, where they avoid taxes that can near 50 percent in some communities.
State taxes include a 15 percent levy on purchases of all cannabis and cannabis products, including medical pot.
Local governments are free to add taxes on sales and growing too, which has created a patchwork of rates around the state.
California Gov. Gavin Newsom has proposed a $213.5 billion state government spending plan that boosts spending on homelessness, wildfire prevention and K-12 education.
His proposal announced Thursday is up $4.5 billion from his first budget plan released in January. It includes a $21.5 billion surplus that is unchanged from January but remains the largest surplus in at least 20 years.
He now hands the proposal to state lawmakers, who must pass a budget by June 15 or lose pay.
The Democratic governor’s proposal puts $15 billion toward state reserves and paying down debt, up $1.4 billion from January.
Newsom has added about $150 million in grants to local governments to deal with homelessness, calling the problem “a stain on the state.”
He’s added $40 million to deal with wildfires and natural disasters.
California Gov. Gavin Newsom is preparing to reveal a revised plan for how the state should spend its more than $200 billion state budget.
The Democratic governor’s plan will be announced Thursday and kick off weeks of negotiations with lawmakers, who have until June 15 to pass a budget.
His first plan announced in January predicted a $21.5 billion surplus, the state’s largest in 20 years. It could increase after the state received several billion dollars more than predicted in April income taxes.
Newsom’s first spending plan included new investments in schools, welfare and housing. But he also preached discipline, setting aside $13.6 billion in reserve.