I am writing to voice my opposition to Proposition 205 and the legalization of recreational marijuana in Arizona. My intention is to inform the public about critical facts that are missing from the discussion about the taxation of the marijuana industry, and why they should view with skepticism the major claim of Proposition 205 proponents; namely, that the legalization will bring in additional tax revenue, particularly for schools.
The marijuana industry in Arizona has failed to follow basic state law regarding the listing and reporting of their business personal property in Arizona. What is business personal property? Basically, every business owns personal property that they utilize to operate their business. This can range from basic things like computers, office furniture and storage racks to specialized equipment that a marijuana growing facility might use like grow boxes, air filtration systems, misting and drip systems, special lighting. These items all have value and must be reported to the county assessor in the county that they are located each year.
The law requiring the listing and reporting of business personal property is a self-reporting, or “on-your-honor” system, which law-abiding businesses in this state comply with. Businesses as large as Intel, Discount Tire, Wal-Mart, and then on down to those smaller “mom and pop” business owners do their best to accurately and timely report business personal property to my office. In fact, there are nearly 10,000 separate business personal property accounts listed with the Maricopa County Assessor’s Office. Marijuana business owners, growers and dispensaries, on the other hand, have failed to file anything since they became legal to operate in 2012. By my best estimates, there are approximately 50 dispensaries in Maricopa County, and not a single one has complied with the law.
Why does this matter? Because nearly 70 percent of taxes collected from the assessment of business personal property taxes goes to fund local education. This means that non-compliance by the marijuana industry in Arizona in listing their business personal property and their subsequent failure to pay any taxes whatsoever is impacting the education of our children. After the Great Recession, with leadership from Governor Ducey, Arizonans approved Proposition 123 to get over $1 billion in new funding to schools. Yet, at the same time state leaders are looking for ways to obtain more dollars for schools, the marijuana industry shirks their legal obligations to pay their fair share of taxes on the personal property used in the creation of a product still illegal under federal law.
I hear talk by the marijuana industry that the passage of recreational marijuana will bring more tax dollars into Arizona, and also that the passage of Proposition 205 will legitimize what has previously been a black market business. My response is, how can we trust the marijuana industry, which will be, by law, comprised of the same actors already in business, to act like legitimate business owners when they have evaded their responsibility to follow the law like everyone else? There is an old saying that bears repeating here: “Fool me once, shame on you. Fool me twice, shame on me.” Arizonans would be wise to remember this when they decide how they vote on Proposition 205. I, however, refuse to be made the fool by the marijuana industry and will vote “No” on November 8.
Paul Petersen is Maricopa County assessor.
The views expressed in guest commentaries are those of the author and are not the views of the Arizona Capitol Times.