Tax revenue generated by legal recreational marijuana is nice to have for some noneducational building costs, but it’s not going to turn around the tight school funding situation in Colorado any time soon, said several leaders of school districts around Southwest Colorado.
“It’s good for one-time expenditures, but you can’t rely on the money, and it doesn’t address the systematic need we have of attracting and retaining teachers,” said Lori Haukeness, superintendent of Montezuma-Cortez School District Re-1.
Dan Snowberger, superintendent of Durango School District 9-R, said the biggest pot of money from Colorado’s recreational marijuana sales goes to fund the BEST grant, a $40 million fund that 178 school districts compete for with grant proposals on building projects or for noneducational purposes such as asbestos removal.
On May 16, administrators from Durango will be in Denver to deliver what amounts to a 2-minute presentation on their grant proposals to partly pay for replacement of a portion of Durango High School’s roof and to partially fund replacement of the district’s outdated electronic locking system at its schools.
“When you take $40 million and distribute it among 178 school districts, it’s minuscule. Proportionally, it’s only a drop in the bucket,” Snowberger said.
Durango School District was luckier than most in the 2017-18 grant-funding cycle for BEST funds. It was awarded $46,921 for partial replacement of the roof at Park Elementary School, with the district pitching in another $83,299. It also received $76,361 for asbestos abatement, with the school district pitching in $130,019 of its own money. By comparison, 9-R’s total budget for 2017-18 was about $48 million.
BEST grants are awarded on a sliding scale; districts that have more at-risk students who receive free or reduced lunches receive a greater share of grant money to pay for projects. However, all school districts must pay for a portion of all projects that receive BEST grants.
In 2017-18, Durango 9-R could get as much as 33 percent of a project funded by BEST grants, but in 2018-19, that will drop to 29 percent, Snowberger said.
Rocco Fuschetto, superintendent of Ignacio School District 11 JT, noted the district had benefited from the BEST grant program when it renovated and added to an older middle school building to convert it to the town’s elementary school. But it was before BEST grants were funded by tax revenue from legal marijuana.
The BEST grant from the 2011-12 fiscal year contributed $6.69 million in funding to convert the old middle school to an elementary school. Ignacio School District paid the remaining $9.10 million to complete the project.
Similarly, the new Montezuma-Cortez High School was partially funded with BEST grant funds, but again, the funding came before BEST grants were funded by tax money from legal pot sales.
BEST funding for replacing Montezuma-Cortez High School came in the 2012-13 funding cycle, the last year BEST did not tap pot tax revenue as its funding source.
The Montezuma-Cortez High School cost $42.08 million. BEST contributed $22.72 million and Montezuma-Cortez School District contributed $19.36 million.
Here are things to know about the relationship between marijuana taxes and Colorado education funding:
First, a 15 percent excise tax is charged when marijuana is sold by a grower to a retail store or a business that makes products like candies, lotion or wax that can be smoked or vaporized.
It is based on the state’s calculation of the average market rate for recreational marijuana. Medical pot isn’t subject to the tax.
Customers then pay a 15 percent sales tax when buying recreational marijuana or products.
People buying medical marijuana or products are charged only the state’s general 2.9 percent sales tax, plus any local sales taxes.
The marijuana amendment that voters approved required the first $40 million in taxes on wholesale marijuana to go into a fund for school construction or maintenance.
Dividing up the state sales taxes on marijuana gets more complicated. Ten percent automatically goes to local governments. A $30 million contribution to a state public school fund controlled by the Department of Education also is required.
Starting this fiscal year, the department will distribute that money to all school districts. In the past, the money could go only to rural school districts.
About 72 percent of the remaining sales taxes go into a fund for various programs on substance abuse prevention and treatment, health care and health education.
The education department can apply for a share of that money but competes with other agencies.
The remaining 15.5 percent of marijuana sales taxes goes into the state’s general fund.
Superintendents have described the marijuana taxes that flow to schools as a “drop in the bucket.”
While the Department of Revenue reported a record $1.5 billion in marijuana sales last year, the state collected about $247 million in taxes and fees.
That’s far lower than the $822 million that Colorado underfunds its schools by each year.
The 2017 state budget provided $5.6 billion for K-12 education that went to the education department, the Charter School Institute and the Colorado School for the Deaf and Blind.
Marijuana tax revenue provided $90.3 million of that total, or about 1.6 percent.
Public school districts and charter schools can apply for a portion of the $40 million designated for school construction or maintenance each year.
Schools report that their needs far exceed that amount. According to a statewide assessment, schools had about $18 billion in capital construction needs through the end of this year.
Projects awarded a share of the money in 2017 included roof replacements, upgraded electrical service and asbestos abatement.
The education department also has received some grants from the marijuana sales tax fund. Examples include grants focused on behavioral health in schools, a bullying-prevention program and K-3 reading programs.
parmijo@durangoherald.com. The Associated Press contributed to this story.
