There’s a gaping budget hole caused by an economy in tatters.
There’s growing voter support and some assurance that the issue is no longer political poison. And there are tax windfalls, potentially huge revenues to be gleaned, if a bill can win bipartisan support in Harrisburg.
For those reasons, some Republican lawmakers in Pennsylvania are coming around — if slowly — to the idea of legalizing marijuana for adult recreational use.
The reasons are not hard to discern.
Since the start of the coronavirus pandemic, the state has lost almost $4 billion in tax revenue. That gap is only growing bigger. The Independent Fiscal Office last month warned taxpayers to be prepared for a “significant reduction” in essential services.
Meanwhile, states with legalized recreational marijuana are reaping major tax revenues.
Illinois, with a population similar in size to Pennsylvania’s, has raked in more than $10 million a month in taxes and fees since it legalized weed for adult use in January. Last year, Nevada collected $99 million; Oregon, $102 million; Colorado, $302 million; Washington state, $390 million; and California, $635 million.
And with New York, New Jersey, and Maryland also considering legalizing marijuana for recreational use, the Keystone State risks losing cannabis sales to its neighbors.
For a state where tax receipts total more than $35 billion, the additional tax collections from marijuana alone would not solve the budget problem, but they could help the state’s fund-starved schools, or repair crumbling roads and bridges. For courts and prisons, legalizing would wipe out the cost of prosecuting marijuana-related offenses.
Until recently, Republican lawmakers in Pennsylvania have uniformly avoided talking about legalization. The state’s legal medical marijuana program, in operation for more than two years, has been touted as an unqualified success by many of the same GOP legislators. But until this month, they have been unified in their opposition to recreational sales.
Faced with deficits larger than those seen during the Great Recession of 2008, some of the GOP’s more pragmatic legislators are giving it new consideration.
“Given the pandemic and the fiscal problems that the state is facing, people who may not have formerly considered recreational marijuana as a revenue generator may be brought to the table,” said State Sen. Dan Laughlin (R., Erie), who may be the first of the Republican caucus to talk openly about it.
“I fully believe that recreational marijuana is going to be one of the pieces of revenue that is certainly discussed in the budget cycle. It absolutely will be,” said Laughlin, who is up for reelection in November. “I’m not a big fan of marijuana, but I also know there’s not a kid or adult in America that couldn’t find a bag of weed if they wanted it.”
Until this month, Democrats monopolized the issue, led by Gov. Tom Wolf, Lt. Gov. John Fetterman, State Sens. Daylin Leach (D., Montgomery) and Sharif Street (D., Phila.), and State Rep. Jordan Harris (D., Phila.). Without Republican support, their efforts have gone nowhere.
State legislators are unlikely to raise income and sales taxes, said State Sen. Tom Killion (R., Chester), especially with so many Pennsylvanians struggling economically — more than 1.8 million Pennsylvanians have filed for unemployment benefits in the past nine weeks.
And there are few things the state can do to raise new revenue.
“A hole of $4 billion may be a very conservative number,” said Killion, who is on the ballot this year. “We won’t know what the real damage will be until after July 15.”
Lawmakers will have to weigh program cuts. Schools could be among the hardest hit.
“It’s a whole new world here. So everything is on the table,” Killion said.
“Historically, there’s been a few people pushing for recreational marijuana use, but never a groundswell in the [Republican-controlled] House and Senate,” Killion continued. “I can tell you as a member of the Appropriations Committee, it’s nothing we’ve talked about yet. But this time around, you’re going to hear everything discussed.”
Public opinion appears to support legalization.
More than 60% of likely voters are in favor of legalizing adult-use cannabis, according to a study released this month by Republican pollster Harper Polling. Surprisingly, nearly 54% of voters who consider themselves “very conservative” or “somewhat conservative” support full legalization.
“Adult-use cannabis has made more rapid growth in becoming accepted by the mainstream than people had previously thought possible,” said Brock McCleary, president of Harper Polling. “And it could generate a substantial amount of money that doesn’t cause pain or angst among voters.”
More importantly to GOP legislators facing reelection, the issue has ceased to be a certain loser.
“It’s important that Republicans not [be] offended in a way that would have them vote against members of their own party,” McCleary said. “That’s partly due to a coalition of voters with a libertarian strain of thought that come at this from a different point of view.”
Only 9% of Pennsylvania Republicans would vote a candidate out of office if they supported a bill that would allow for taxed and regulated cannabis, according to Harper Polling.
“It won’t be held against them. It’s not an issue like guns or abortion,” said Charlie Gerow, a conservative Republican strategist who is the CEO of Quantum Communications in Harrisburg. “A significant part of the population won’t be excited about it, but definitely could live with it, especially considering what we’ll be facing with this budget.”
It could be only a matter of time before more Republicans decide to make legalization a Republican issue, Gerow said, as the potential tax revenues become increasingly more attractive.
“It’s inevitable, so why not get ahead of the curve and do it now,” Gerow said. “The tax dollars will have more leverage if legislators move to legalize it sooner. What’s keeping them back?”