Remember when President Obama promised the ACA would lower costs and allow us to keep our providers? We all know how that turned out.
It seems the same thing happened with tax revenues from the state’s newest industry – Marijuana. When proponents were touting all the reasons we should legalize the industry, funding education was at the top of the list. A few years later, and with substantial collections in taxes from the industry, educators are back at the table asking for more funds for schools. So, what happened to the boatloads of money that was supposed to go to education? It appears that only a small portion of funds collected are directed to education, with the remainder being deposited in the general fund.
When marijuana was first legalized, part of the ballot Question 2 that allowed for the legalization specifically called for an excise tax on wholesale marijuana sales from large-scale cultivators and distributors. It was a condition of legalizing marijuana and those funds are currently being funneled into Nevada’s Distributive School Account (DSA), as they were always meant to. However, there is also an excise tax on retail marijuana sales, on top of regular sales tax, that doesn’t get put into the DSA, even though that was the original intention with the tax.
“The tax was first contemplated after Question 2 had already passed, during the governor’s 2017 State of the State address,” explained Daniel Honchariw, a senior policy analyst with the Nevada Policy Research Institute. “In the speech, Governor Sandoval indicated that he wanted this additional tax and those new revenues would also funnel directly towards education. Unfortunately, the 2017 Legislature, after they passed the 10 percent retail tax, failed to steer its revenues to the DSA due to a procedural technicality during the appropriations process. Instead, those revenues have been funneling to the state’s ‘rainy day’ fund.”
The good news is that legislators have the opportunity to redirect the funds to education. It’s my understanding they plan to make the necessary changes in the 2019 session.
Unfortunately, our education funding issues can’t be fixed simply by redirecting funds. When that large chunk of change from marijuana gets dropped into the DSA, it’s not going to alter the amount that education gets per pupil. Rather, less money from the state’s general fund will be sent to education as less will be needed.
“It will supplant, not supplement,” said Honchariw. That’s not a bad thing but it does make it clear that funds are not the bigger issue here. The money is there but the system and the funding models need reform urgently. Recently, several Nevada school districts, including both Clark and Washoe County, joined to support the Fund Our Future Nevada initiative in order to make changes to the DSA’s funding formula.
Call to Action: Changing the state’s funding formula for education is a necessary step in the right direction. If education stakeholders claim not to have enough money but state and tax revenue, from both business and marijuana, are overwhelming being sent to the DSA, clearly there’s a disconnect. While I advocate demolishing our entire Nevada education system and starting from scratch (with some notable exceptions) and copy other excellent education model systems working across our country, we need to immediately address the problem at hand and fix the Marijuana education funding formula and connect the dots; thus, fulfilling the promise made to our citizenry.
2 Chronicles 7:14 (NKJV) “If my people who are called by My name will humble themselves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land.”
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