Like so many of the trains on America’s largest subway system lately, Donald Trump’s infrastructure plan is mired in delays.
In May, the White House released a six-page memo proposing $200 billion in funding over ten years as President Trump was trundling through Europe and the Middle East. But the outline included no details about who would get the cash and how it would be spent.
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After the president returned home, he launched a so-called “Infrastructure Week” that was overshadowed by former FBI Director James Comey’s must-watch testimony to Congress. The Russia scandal hasn’t exactly fizzled out since then.
And lawmakers have had other priorities—like trying to pass a bill to gut Obamacare, lift the nation’s debt ceiling, overhaul America’s tax code, and maybe even fund the government.
Meanwhile, America’s highways, mass transit systems, and and sewage plants aren’t getting any younger.
As the president punts on a signature campaign pledge, states will try and make up the difference. And one obvious, if still kinda controversial, potential source of revenue has legislators geeking out.
Weed.
Since 2012, Colorado, Washington, Oregon, Alaska, California, Maine, Massachusetts, Nevada, and DC have begun allowing adults 21 and older to buy or possess marijuana legally. Many more states allow for the drug’s medical use.
Legal pot sales last year reached $6.7 billion across North America, and US state governments are set to rake in $559 million in weed-related taxes in 2017, according to one recent industry analysis. If all states legalized and taxed pot sales, they could haul in between $5 billion and $18 billion per year, a May 2016 study by the nonpartisan Tax Foundation found. A federal tax similar to current one on cigarettes could reap an additional $500 million, the study suggested. (Of course, under Attorney General Jeff Sessions, national legalization seems extremely implausible.)
But it’s not just pie-in-the-sky revenue projections we’re talking about here: states that legalized marijuana are already reporting tangible gains.
Colorado, which permitted the sale of recreational marijuana beginning in 2014, has scooped up nearly $204 million from taxes, licenses and fees in fiscal year 2016-17, up 43 percent from the previous year, when the state collected $142 million. Washington State garnered $186 million in weed taxes in fiscal year 2016, up almost 188 percent from 2015, when the state took in just shy of $65 million. The state expects to grab another $730 million in taxes over the next couple years.
Policymakers around the planet are taking notice.
“We’re the first government in the world to have a legalized tax system, so governments have wanted learn from our example and avoid growing pains we’ve had,” Colorado Department of Revenue spokeswoman Mim Mirsky told me. “People are very curious, especially when they hear about the money and how we’re managing the system.”
Governors and legislators are splashing this new revenue stream across an array of law enforcement, health, and education programs. Colorado, for its part, is spending $40 million of its pot tax revenues this year on building and renovating public school buildings, giving a new meaning to annual school bake sales.
“It’s not sexy to talk about HVAC or mold and remediation systems, but if you live in a community that doesn’t have heat in the winter, then it’s an exciting source of revenue, especially in our rural areas,” Mirsky told me.
Intent on getting their own crack at this cash bonanza, lawmakers in Vermont, Connecticut, New Jersey, Rhode Island, and New York have pushed since January to legalize bud. Vermont came closest, passing a bill legalizing recreational marijuana in May, but Republican Governor Phil Scott vetoed the measure despite swearing he was “not philosophically opposed” to ending pot prohibition.
Andrew Cuomo, the Democratic governor of New York, has also opposed legalizing marijuana. He said in February he was “unconvinced” by arguments in favor of recreational pot and even went so far as to call the substance a “gateway” to more dangerous drugs.
But Cuomo is also taking a ton of shit right now over the state of New York’s subways, which are run by the MTA, a state-controlled agency. Manhattan Democratic Senator Liz Kruger, co-sponsor of a New York legalization bill, wants revenue generated from its passage to go toward drug prevention and education programs. But she’s not opposed to other uses, like reining in the subway fiasco.
“Every year a state has different priorities,” she said in an interview. “If someone says there’s a subway crisis and you have extra revenue in the marijuana fund, I’d say yes, let’s get them some money.”
Most states, including many that have not legalized marijuana, have their own infrastructure wish list on which they hope (or at least hoped) the Trump administration might splurge. Ohio and Kentucky want to replace Cincinnati’s Brent Spence Bridge, which could have a $2.5 billion price tag. North Carolina needs to repair sections of Interstate Highway 95, which could cost $1.5 billion. And Louisiana wants to dredge the Mississippi River Shipping Channel for a cool $1 billion.
New York has a bevy of rail projects that need cash ASAP, including the construction of a new rail tunnel under the Hudson River and the maintenance of its century-old mass transit system. The MTA has spent $100 billion on the subway since the 1980s, but that doesn’t seem to be close to enough. Some experts believe the subways need another $35 billion just to maintain adequate service.
Taxes on marijuana are already plugging gaps in health and education in legal weed states. But the infrastructure crisis has reached a critical stage—and missing out on a huge potential infusion of cash seems increasingly insane.
“If you were to assign [marijuana tax revenue] to something, it seems more logical to earmark it for health needs,” said Maria Doulis, vice president of the nonpartisan Citizens Budget Commission, a good government group in New York. “Otherwise put it in the general fund and use it as you wish. If the need now is for infrastructure, then use it for infrastructure.””
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This story has been updated to include a more complete version of a quote from Maria Doulis.
