Reported Cost of Implementing Recreational Marijuana Measure Seems Inflated

Today the Legislative Management Committee in Bismarck is receiving a report on the fiscal impacts of the four measures on the statewide ballot. You can read the agenda for the meeting here. That PDF contains links to the reports on all of the measures.

The report on Measure 3, to legalize recreational marijuana, is the most interesting but before we get to that here’s quick summary of the fiscal impact of the other measures as reported to the committee:

• Measure 1 (ethics committee): OMB says the cost of implementing can’t currently be calculated.
• Measure 2 (non-citizen voting): Secretary of State’s office says there will be no cost of implementation.
• Measure 4 (free license plates for first responders): The Department of Transportation estimates a loss of about $17.7 million in revenues over the next decade

I’m surprised at the cost of Measure 4 in lost revenues, but maybe that’s worth it as a fringe benefit for first responders? Particularly the volunteers?

Still, the measure with the biggest cost reported to the committee is Measure 3 (see below). The Office of Management and Budget collected information from a myriad of state agencies thought to be impacted by the implementation of this measure, should it pass, and they came up with a cost of over $6.64 million from the date of implementation (30 days after the election) through the end of the next biennium.

But I’m not sure how much stock we should put in that figure.

For one thing, the bulk of that cost comes from the Department of Health which reports that it will cost them over $4.3 million. Only most of that figure is related to a public information campaign they’re planning on the dangers of marijuana use. Here’s how they describe it:

It’s important to understand the potential fiscal impacts of any given ballot measure, but some of the expenses reported here by the Department of Health seem…debatable.

Why are we assuming that we’ll need the government to start a campaign to lecture us about underage marijuana use (the measure makes marijuana illegal for people under 21)?

Why are we assuming that we need to hire someone to lecture “vulnerable populations” and “breastfeeding mothers” about marijuana full time?

This seems less a legitimate accounting of the costs of this measure than a wish list from funding-hungry bureaucrats.

The report from the North Dakota Highway Patrol, while not indicating a specific fiscal impact, makes an interesting point about the problems legal pot may present for drug search and seizure. They point out that drugs found along with marijuana could perhaps be disallowed as evidence because it could be argued that the impetus for the search resulting in finding the drugs was a dog alerting to legal marijuana. Their dogs will have to be retrained:

Of course, the impact of Measure 3 isn’t all fiscal cost. There are some positive ramifications for tax revenues – the sales tax will apply to marijuana and related products – but the Tax Commissioner’s office wasn’t prepared to estimate a dollar figure:

Any cost of Measure 3 is going to be offset, to some degree, by a boost in tax revenues.

Here’s the full report from OMB provided to the committee:

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