Council Set to Raise Pot Club Taxes

The City Council will vote Tuesday on whether to pursue a tax hike on medical marijuana collectives, bumping up fees to the maximum amount allowed under the voter-approved pot club tax Measure U. There seems to be little doubt that San Jose’s marijuana tax will increase from 7 to 10 percent.

Increasing the tax would rake in an additional $1.5 million in revenue, according to city staff, bringing current year projections up to $5.4 million. The proceeds pay for staff to oversee the program as well as some city services, like police, fire, first-responders, street maintenance, parks, youth and senior programs, pothole fixes and libraries.

A legal precedence recently set by a California Supreme Court judge reinforced cities’ authority to either ban or regulate pot businesses. San Jose, which already allows dispensaries, decided to simply pursue a higher tax.

City staff aims to write up an ordinance to go before the council in June—just in time to vote on it before the new fiscal year starts on July 1.

More from the San Jose City Council agenda for May 21, 2013:

• Judy Rickard, an activist for immigration reform for bi-national same-sex families, will be recognized for being named a Cesar Chavez Champion of Change by the White House.

• The city’s asking to increase a contract for legal services related to employment, labor and pension reform by another $900,000. If approved, that would increase the total contract with Meyers, Nave, Riback Silver and Wilson to $2.1 million. Here’s the latest legal update on Measure B, from the city’s perspective.

Targeted Employment Areas (TEA) are census tracts deemed to need more job growth. Employers who hire people from a designated TEA are eligible for a $37,000 tax credit per hire. The city wants to update its TEA designations to help companies take advantage of the tax break.

• Sewer flow monitoring will cost the city $4.5 million if the council OKs a contract with ADS Environmental Services, Inc.

• If approved, a two-year contract with Athens Administrators to handle some claims administration will cost $4.6 million. An audit of the city’s workers comp program found that it spends more than comparable cities. Hiring a company to streamline its administration could help the city realize a cost savings of about $10 million, according to Deputy City Manager Alex Gurza.

Recycling rates could go up a few dimes to a dollar, depending on the service.

Team San Jose, the company that manages the San Jose Convention Center and six other cultural facilities, needs a revised incentives agreement with the city since the original was incorrectly calculated.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: 408.535-12.60

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

8 Comments

  1. The latest “legal update on Measure B from the City’s perspective…”

    Characterizing that memo that way is just a wee bit of an overstaement. I get that the collective egos running the City do not want anyone to hear the true state of legal proceedings on Measure B and pension reform and it may be too soon to call the final outcome but,  as things stand right now… I can sum it up to this point by saying:  “We told you so…”

  2. There is very little in the world that marijuana can’t improve. Just consider these three points.

    1. > “The city expects up to $3.7 million in marijuana tax revenue by the end of the 2012-13 fiscal year, according to a bi-monthly finance report issued in April.” <

    2. >> “The City Council [tomorrow] will vote whether to pursue a tax hike on medical marijuana collectives, bumping up fees from 7 to 10 percent the maximum amount allowed under the voter-approved pot club tax Measure U.” <<

    3. >>> “Increasing the tax would rake in an additional $1.5 million in revenue, according to city staff, bringing current year projections up to $5.4 million. The proceeds pay for staff to oversee the program as well as some city services, like police, fire, first-responders, street maintenance, parks, youth and senior programs, pothole fixes and libraries. <<<

    San Jose: If this is wrong, I don’t wanna be right.

  3. Anybody want to bet that “Legal Fees” for the Mayors ILLEGAL Measure B will top 8 to $10 Million Dollars ? The Mayor & Council were both advised that it was illegal and still they decided to push forward in decimating public safety , Public trust , and any belief that The Mayor and Council were Honorable in any way . They will continue to waste taxpayer monies rather than Negotiate or ever admit they were wrong.

  4. > There seems to be little doubt that San Jose’s marijuana tax will increase from 7 to 10 percent.

    Marijuana is at minimum a nuisance, a vice, or maybe both.

    It should subject to “sin” taxes at least as serious as, oh say, smoking a cigarette.

    I say slap the marijuana special interests with an excise tax of 10,000 percent.

    Also, slap them with pollution taxes for causing smoke to be released into the atmosphere.

    And also, slap them again with a special education tax to be used to run ads to tell kids NOT to use marijuana.

    And while we’re still in a taxing mood, slap them with a health assessment tax to offset all the health related costs resulting from pot usage, like damaged chromosones, brain damage, over eating. and obesity.

    • Responding to the post above from Lou Scannon, about how “Marijuana is at least as serious as, oh say, smoking a [tobacco] cigarette.”

      Lou “basically combat[s] all the evidence for Medical Marijuana.” And replacing it with the “Reefer Madness” stereotype—as in not knowing what he’s talking about.

%d bloggers like this: