The last two regular meetings of the Grand County Board of County Commissioners (BOCC) saw Commissioners in discussion over potential ballot issues for the 2018 general election, with some roller-coaster moments. With three issues and up to five questions under consideration, it first appeared as if none would make it onto the 2018 ballot, due to a missed filing deadline. In the end, and after clarification from the County Clerk and Recorder, three resolutions will be presented to the Board at the next meeting for proposed ballot questions on two Marijuana taxes and an opt-out of a State telecommunications restriction.
The published August 6 agenda included scheduled discussion on the prospective ballot measures, including the proposed taxes on marijuana sales and transfer, a so-called broadband initiative, and concerns about ongoing funding for 911/dispatch and other emergency services. Commissioner Rich Cimino, who was present by teleconference, was asked to re-introduce the marijuana and telecommunications issues, as he was the one to have first brought each of them forward last year.
On this occasion, Cimino began by revisiting the issue of marijuana taxes and referenced a map, demonstrating the spread across Colorado’s counties of special sales tax on what is termed retail or recreational marijuana. He indicated that 15 of the state’s 64 counties currently impose an excise tax on marijuana, including neighboring Routt, Jackson, Gilpin, and Clear Creek Counties. Adams and Denver Counties have sales taxes in place and Eagle and Pueblo Counties have both a sales and excise tax in place. The taxes are not being imposed on medicinal-grade products.
Recreational marijuana was legalized by Colorado voters in November 2012, and the first legal sales began January 2014. Grand County has issued a number of licenses and currently has three retail outlets, two in unincorporated Tabernash and one on the outer edge of Winter Park. Other than licensing fees, meant to pay for the administrative costs of licensing, Grand County only receives 10 percent of the 15 percent State sales tax collected, or 1.5 percent on local retail marijuana sales. Cimino raised the issue in 2017 as a place where potential revenue was being lost.
In explaining his interest this year, he said, “I’ll state publicly, my initial thoughts were to only ask for a sales tax in Grand County, but my personal desire was that we put it on the ballot for the voters to decide if they want a county sales tax on marijuana that would be equivalent to whatever Fraser has.” He continued, “As far as excise– which a lot of citizens have asked about– I think it would only affect one license holder in the county, and I would welcome discussion.”
But before discussion could advance further than a single statement of support from Chair Merrit Linke, County Attorney Bob Franek expressed concern that the County was going to be “tripped up” by a State statute that mandates, “All political subdivisions are to notify the County Clerk, in writing, that it’s taken formal action to participate in the general election 100 days before the election” — or by July 30 of this year. He further indicated a concern that the State does not collect, administer, or enforce local taxes on marijuana and that it would be up to the County to set up a system to do so. However, discussion was already derailed, upon recognizing that formal written notice had not been given for any of the proposed ballot measures. Franek continued by saying that the County Clerk did not seem to think the statute was a reason not to move forward with the initiatives, but that “if it were challenged, it could be a problem and could be nullified later on.”
Amidst the ensuing confusion and frustration about how such a deadline could have been missed for issues introduced a year ago, the second topic of the “Broadband Initiative” was brought up as potentially valid for this year’s vote. A resolution had been presented and passed unanimously by the Commission in 2017 which, if passed by voters, would have allowed the County to opt-out of Colorado Senate Bill 152, a piece of legislation prohibiting any governmental entity in the state from using public infrastructure, either directly or with private partnership, to offer telecommunications services. Examples of the realistic impact of the bill are that county buildings cannot offer free WiFi to guests or offer such services at county-owned facilities for special events. As of this April, over 125 counties and municipalities have opted out of the legislation.
While the BOCC approved a similar resolution for presentation on the 2017 ballot, the County ultimately opted to cancel the election entirely, in an off year, with only a single issue to present to voters. The general sentiment expressed on the 6th of this month was that the previous resolution should serve as timely notice to the Clerk’s Office, enabling it to be presented for the 2018 election.
Representatives from the County’s emergency services were also present, including Brett Schroetlin, Grand County Sheriff, and Todd Holzwarth, East Grand Fire Chief and Chair of the Local Emergency Planning Committee. They had hoped to have discussion over issues facing such services across the state with a loss in revenue. Funding for the County’s 911 dispatch services is at especial risk, as most funding comes from a surcharge levied on land lines, the number of which is diminishing each year. Emergency services leaders are looking at a number of ways to “increase and stabilize funding” for 911, including increasing the surcharge levied on phone lines and a potential mil levy. It was recognized again, though, that the 100-day deadline had passed without proper notice to the Clerk.
The measures were all brought back on August 14th, however, with Sara Rosene, County Clerk and Recorder, present for clarification. She began the renewed ballot discussion by saying that “this is not a hard and fast deadline for the County Clerk” and that “it clearly says in the statute that failure to receive such notice in a timely manner does not prohibit the County Clerk and Recorder from entering into the agreement in running the election.” She continued by stating that “the intent, according to an attorney at the Secretary of State, is that County Clerk’s must accept ballot questions– must.”
Franek took up the marijuana tax issues at that, asking the Commission to determine what any sales tax revenue would be used for, what percentage would be imposed, and how much revenue could be expected by such a tax. He explained that such a tax would be levied as a percentage of a retail sale to the end consumer. Fraser, for example, the only municipality in Grand County to permit marijuana businesses, currently imposes a 5 percent sales tax on marijuana, equivalent to its general sales tax.
Finance Director Curtis Lange presented evidence that annual recreational marijuana sales in the county could be estimated at close to $6.2 million, meaning a 5 percent tax could bring in an additional $310,000 a year. The estimate is based on monthly sales numbers reported to the State for the early months of 2018. Commissioners directed Franek to draft a resolution based on these numbers to be presented in final form at next week’s regular meeting of the Board. The resolution will specify that revenue will go into the General or Road & Bridge funds, to be used for such purposes as decided by the governing body.
Commissioners also discussed drafting a similar resolution for an excise tax, to be levied on cultivators or producers at the first sale or transfer of product. The possible excise tax is capped at 5 percent and Franek gave examples of both Eagle and Pueblo Counties starting at lower rates and gradually increasing it, to ease the impact on such businesses. Cimino took this up as one way to possibly prevent businesses from leaving the county when faced with increased taxes for operation. Commissioner Kristen Manguso remained concerned about administrative costs and whether or not the additional task of administering and enforcing such tax collection would be too costly for the County in the end. She requested some cost-benefit analysis on the creation and application of a new tax-collection program.
The previous Broadband resolution was also revisited, with Manguso reading a letter of opposition from a local internet services operator. The letter asked numerous questions about public notification, the pressing need to pass the opt-out, and a potential financial interest by Cimino. It also stated that the measure would discourage private investment in the telecomm industry. Cimino responded that the company in which he has some interest, Slope Side Internet, would stand to lose money if the County were to get into “the business of internet.” Linke then indicated that the 2017 resolution clearly read that the County was “not obligated” to provide such services and that they were merely asking voters to “not have our hands tied.” Manguso stated that she would like to have the constituent’s questions answered and their voice to be heard. Linke cut short further discussion.
Chief Holzwarth was present again, but the consensus of the Board, Attorney, and Chief was that the emergency services entities were not ready to present for the 2018 ballot.
September 7 is the firm date for ballot measures to be presented in full to the Clerk and Recorder. The Board will look at final resolutions on the marijuana tax issues and the SB 152 opt-out initiative in the next coming weeks.