LA County Kills Medical Marijuana Tax Bill

Los Angeles County officials moved in July to withdraw a proposal that would have taxed medical marijuana sales and used the revenue to fight homelessness in the City of Los Angeles.

The decision by the county’s Board of Supervisors followed an earlier vote to put a tax initiative on the Nov. 8 countywide ballot. The proposal would have levied a new sales tax on medicinal pot sales throughout Los Angeles and the rest of the sprawling county.

Supervisors pushed the bill earlier in the month as a solution to a growing epidemic of homelessness in Los Angeles. They preferred the idea to a hike in the county’s general sales tax, an approach that has been defeated repeatedly in the past. Other failed efforts include a proposed “millionaire’s tax.”

The new tax initiative passed by a 3-2 vote and was headed for the November ballot. Government estimates predicted it could raise $130 million to pay for health services and housing for homeless people in Los Angeles, but supervisors voted later in July to withdraw the proposal and go back to the drawing board.

Issue with the bill’s language

Supervisor Sheila Kuehl, who introduced the bill, announced she would pull it over two major problems with its language. She filed a formal motion in late July to rescind the measure.

The first issue involved what Kuehl described as a “great deal of ambivalence” on the part of groups that serve the homeless population, especially addiction rehab centers. Receiving funding from a tax on a potentially addictive drug would run counter to the beliefs of many of these providers.

Without their backing, Kuehl said, the county can’t win the two-thirds majority of voters needed to pass the tax proposal.

“We certainly didn’t want to raise millions of dollars for a campaign and have it fail by two or three points,” she told the Los Angeles Times.

The other problem involved the timing of the initiative. State law limits taxes on retail medicine, meaning the revenue would come mostly from recreational pot sales – sales that aren’t even legal yet. That could change in November, when voters are expected to pass the Adult Use of Marijuana Act and legalize the drug for recreational use.

Acting prematurely

But opponents of the tax proposal said the county should wait until that happens before trying to impose a new sales tax.

“It’s premature to talk about what L.A. will do with cannabis tax revenue,” said Ariel Clark, chairperson of the Los Angeles Cannabis Task Force. “Today, cannabis businesses are banned in L.A. County . . . We need fair local licensing laws that align with state law. Until then, proposals like these are wishful thinking.”

Homelessness has reached critical mass in Los Angeles, with huge tent cities sprawling across entire neighborhoods. City and county leaders are experimenting with new approaches to the problem, including efforts to directly provide housing for homeless residents.

But those programs are very expensive, leaving local leaders looking for ways to raise more money. Estimates suggest it could cost upwards of $450 million to find enough livable homes for people living on the streets of Los Angeles.