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Marijuana Tax Revenue and Education FAQ

Frequently Asked Questions about Marijuana Tax Revenue and Education

1. How is marijuana taxed?

Excise taxes: The state of Colorado levies a 15 percent excise tax on wholesale marijuana, which is the product before it is sold to customers. 

Sales taxes: The state also imposes a 15 percent sales tax on retail marijuana as well as the regular 2.9 percent sales tax on both retail and medical marijuana. Local jurisdictions may levy their own sales taxes.

2. How much money comes to the Colorado Department of Education from marijuana taxes?

In 2015-16, the total marijuana tax revenue for the Colorado Department of Education was $86.3 million.

In 2016-17 the total marijuana tax revenue for CDE was $54.2 million.

In 2017-18, the total marijuana tax revenue for CDE was $90.3 million. However, to put that into perspective, the marijuana tax revenue from 2017-18 was roughly 1.6 percent of the state's K-12 education budget of $5.6 billion, which encompasses the budget of CDE, the Charter School Institute and The Colorado School for the Deaf and the Blind.

3. How is the money distributed?

The money is distributed to a variety of programs, including school construction, bullying prevention and behavioral health.

  • Excise tax: The state constitution mandates that the first $40 million in revenue from excise taxes on wholesale marijuana must be credited to the Building Excellent Schools Today (BEST) fund to renovate existing school buildings or construct new buildings. The BEST fund also receives money from the Colorado Lottery, the State Land Board and from interest. It is worthwhile to note that a statewide facility assessment determined a need of nearly $18 billion in capital construction through 2018. Revenue in excess of the $40 million is credited to the Public School Fund, which is operated by the State Treasurer's Office.
  • Sales tax: The state began levying a 15 percent sales tax on retail marijuana in July 2017. Ten percent of that tax must be allocated to local governments. 
    • How the remaining 90 percent will be allocated in FY2017-18: 
      • 28.15 percent, minus $30 million to the General Fund
      • 71.85 percent to the Marijuana Tax Cash Fund (MTCF)
      • $30 million to the state public school fund and distributed to rural school districts with 55 percent going to large rural school districts and 45 percent to small rural school districts
    • How the remaining 90 percent will be allocated in FY2018-19:
      • 15.56 percent to the General Fund
      • 71.85 percent to the MTCF
      • 12.59 percent to the state public school fund and distributed to all school districts

4. What is the Marijuana Tax Cash Fund? 

The state legislature in 2014 created the MTCF to collect tax revenue from retail and medical marijuana sales. The legislature ensured that revenue from the fund must be spent the following year on health care, to monitor the health effects of marijuana, health education, substance abuse prevention and treatment programs and law enforcement. Several agencies throughout Colorado government receive revenue from the MTCF. 

The Colorado Department of Education has received money from the fund specifically for:

  • The School Health Professional Grant program to address behavioral health issues in school
  • A grant program to help schools and districts set up initiatives to reduce the frequency of bullying
  • Grants to fund drop-out prevention programs
  • Early Literacy Competitive Grants to ensure reading is embedded into K-3 curriculum

 

5. What is the specific breakdown of CDE's programs that have received marijuana revenue from 2015-2017?

School Construction – BEST

  • 2015-16: $80 million*

  • 2016-17: $40 million

  • 2017-18: $40 million

*Includes $40 million from one-time tax revenue disbursement approved by voters, allowing Colorado to keep surplus

Early Literacy Competitive Grant Program

  • 2016-17: $4.4 million

  • 2017-18: $4.4 million

School Health Professional Grant Program

  • 2015-16: $2.3 million

  • 2016-17: $2.3 million

  • 2017-18: $11.9 million

School Bullying Prevention & Education Grant Program

  • 2015-16: $2 million

  • 2016-17: $900,000

  • 2017-18: $2 million

Drop-out Prevention Programs

  • 2015-16: $2 million

  • 2016-17: $900,000

  • 2017-18: $2 million

State Public School Fund

  • 2017-18: $30 million

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