How States Use Recreational Marijuana Revenue to Fund K-12 Education

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    This is a companion post to “When Medical Marijuana Meets School Drug Policy, What Can States Do?”  which looks at states that have modified school drug policies in light of medical marijuana laws.

    Revenue from recreational marijuana sales can be a large influx of cash for a state and, in many cases, vitally needed cash. Currently, 10 states and the District of Columbia allow the use of recreational marijuana. Colorado and Washington were the first states to legalize the green plant in 2012; other states have slowly followed. Each state deals with regulation and taxation differently, but a common use for marijuana tax revenue is spending on K-12 education.

    For example, in Colorado, the marijuana ballot initiative, Amendment 64, requires that a portion of the taxes go toward funding construction of public schools. Voters also approved Proposition AA, which imposes additional taxes on marijuana that can be used for other education-related purposes. In the first 11 months of 2018, Colorado collected roughly $245 million in tax revenue from marijuana sales, licenses and fees. In addition to funding for school health professional grants and bullying and dropout prevention programs in 2017, the state allocated $4.4 million for early literary competitive grants, $40 million for school capital construction and another $30 million to the State Public School Fund.

    Like Colorado, Nevada and Oregon included language in state ballot initiatives ensuring a portion of tax revenue is used on education. Oregon’s Measure 91 requires 40 percent of tax revenue to go into the Oregon Common School Fund. In 2017, that equated to $34 million. Nevada’s Question 2 requires taxes to be used to cover the costs for the department of taxation and local governments to administer the excise tax, but excess revenue can be used for K-12 funding. Additionally, Michigan’s Proposal 1, which recently passed in November, stipulates that 35 percent of the revenue left over after implementation and administration costs must go into the state school aid fund.

    Other states use marijuana revenue to fund public health initiatives. For example, Washington allocates funding for programs focused on preventing substance use disorder in teens, a state health youth survey and media education campaigns on safe marijuana use.

    It is hard to know if promises of increased education funding are behind some of these initiatives passing, but the measures seem to show that many states think the money would be well spent in schools.

    We frequently receive questions from policymakers about using marijuana tax revenue for K-12 education. A full response, including additional information on state policy, can be found here. If you have a question about this or other education policy topics, please contact us.

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    Policy Researcher at Education Commission of the States | jmullen@ecs.org

    As a Policy Researcher, Jill works on education policy issues from early education to workforce development. Prior to joining Education Commission of the States, Jill worked as a legislative staffer in the Colorado General Assembly. Jill earned her J.D. from the University of Denver Sturm College of Law.

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