Sales of recreational pots in Illinois have already broken records last year, generating millions in tax revenue for municipalities.
So how much do they get and what are they used for?
State law allows municipalities to levy up to 3% on sales of recreational pots, in addition to existing sales taxes. Each city uses money differently, but the consensus is that the rulers don’t want to trust it.
Marijuana sales tax revenues will not remain consistent enough to be used for essential services such as policing. The state plans to issue more dispensary licenses over time, making sales competition more intense.
They help with the extras, said Richard Sauget Jr., mayor of Sauget, a village named after his great-grandfather.
The village received $ 187,765 in 2020 from its cannabis sales tax, Sauget said, and so far this year it has collected $ 758,746. This makes a difference in the city with a population of around 150 and where there are two cannabis dispensaries.
All local tax revenue generated goes to public security. The village used the money to buy two new police cars and increase officers’ salaries, helping them attract candidates to fill three positions.
But Sauget said the village would not rely on the money.
“Our individual slice of the pie will get much smaller just because there will be more dispensaries there,” Sauget said. “Were taking that into account, because (sales tax revenue) will decrease for us as competition in the region comes.
Revenue from the pot is a big plus in Quincy, a western Illinois town of about 39,400 on the Mississippi River with three dispensaries, one of which only sells medical marijuana. Mayor Mike Troup said all of their 3% tax money goes to the $ 100 million unfunded firefighters and police pension bonds. They must be caught up by 2030 unless the state grants them an extension, the mayor said. The tax revenue from the pot is not generating enough to cover the bill.
“One hundred million is more than twice what we get from the property tax, ”Troup said. “But what are you going to do?” Shut down the government just to pay your pensions? It’s not going to happen. “
Troup declined to share the amount of tax revenue the city received, citing a state law that allows companies to keep their sales information private. The money helps pensions, he said, but the city will have to look elsewhere to pay off the rest of its retirement debt.
“It’s far not the solution, but it’s useful for adding dollars to those unfunded liabilities,” Troup said.
Collinsville was the first metropolitan city in the east to start selling recreational marijuana after it became legal in 2020. Revenues from the 3% sales tax at the city’s sole dispensary have exceeded expectations, said Deputy City Manager Derek Jackson.
The city collects more than $ 100,000 on average each month in sales taxes, Jackson said. Income is over $700,000 from July to December 2020 and just over $ 900,000 so far this year. The city expects that figure to reach $ 1.2 million by the end of the year.
The money goes directly into the city’s capital projects fund, which is used to maintain or build the city’s infrastructure. They used the money to build new sidewalks, repaving roads, improving parks, and expanding sewers, among other projects.
“There are projects that we would be on a path to do in a few years that we could do now,” Jackson said. “It was a win-win at all levels.
But like other city executives, Jackson said he expects sales to decline as competition intensifies. After a dispensary opened in nearby Fairview Heights in March, sales tax revenue in Collinsville fell 5%.
Edwardsville, Belleville and East St. Louis could become competitors when more dispensary licenses become available. We don’t know when this will happen. Between legal challenges and the COVID-19 pandemic, the rollout of recreational marijuana in the state has been delayed.
In the meantime, the money is nice, but city leaders know it won’t always make sense.
“We know it won’t be here forever,” Jackson said.
This story was originally published December 1, 2021 5:00 a.m.