Gov. Gretchen Whitmer elicited laughter at the Mackinac Policy Conference on Thursday when she reiterated that every adult and child in Michigan would have to spend $2,500 a year on legal marijuana to raise enough money in taxes to fix the damn roads.
“And let’s be honest: At that level, no one’s going to care about the damn roads,” Whitmer joked.
Truth is, all 10 million Michigan residents, including children, would have to buy more than $7,000 worth of legal marijuana a year to generate $2.5 billion in needed roadwork. But since recreational marijuana sales are illegal for people under the age of 21, it would take more than $10,000 a year from every resident 21 and older.
So how much pot would $10,000 buy?
Let’s break it down:
• 1,000 joints at $10 each.
• 222 eighths at $45 a pop.
• 30.8 ounces at $325 each.
Whitmer based her numbers on a 10 percent excise tax that will be imposed on the sale of all recreational marijuana beginning next year. Under her hypothetical, every penny raised from the excise tax would be spent on roads. But state law only allows Michigan to tap 35 percent of the excise tax for roads. The rest of the money goes to schools, cities, and counties.
If every Michigan resident, including children, spent $2,500 a year on legal marijuana, that would only raise $875 million — about a third of what’s needed.
Whitmer’s spokesman Tiffany Brown acknowledged that the governor’s hypothetical “ignores fund distribution issues” with the excise tax.
Either way, the point is clear: The recreational marijuana excise tax won’t raise nearly enough money to fix the damn roads.
Whitmer has proposed increasing the fuel tax by 45 cents to finance the roadwork. But Republican lawmakers have rejected the plan without offering an alternative solution.
The Senate Fiscal Agency estimates that each adult is likely to only spend an average of $140 a year on state-sanctioned pot. The state is expecting about $1.1 billion in cannabis sales in 2020 to 2021. That would generate $32.1 million in new road taxes — or just 1.3 percent of the needed $2.5 billion.
To raise $2.5 billion for the roads, licensed dispensaries would have to sell $714.3 billion worth of marijuana a year — or more than 71 billion joints, 15 billion eighths, or 2.2 billion ounces.
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