“Changing how these funds are used could have an impact on the economic efficiency in legalizing recreational marijuana.”
By Rob Moore, Scioto Analysis
Ohio was the 24th state in the country to legalize marijuana sales and purchases for recreational purposes. Leaders in the Ohio General Assembly had already signaled their intention to change the law following the passage of Issue 2.
Issue 2, unlike Issue 1, was an initiated statute.
The legislators could then go back and amend the law. It seems that they plan to do this.
While the discussion of Issue 2 has centered on public health, the legislative leaders have focused on the use tax revenues raised from excise taxes on marijuana purchased and sold for recreational purposes.
The Ohio State University Drug Enforcement and Policy Center estimates that the excise taxes could raise hundreds of millions of dollar.
Last summer, my firm Scioto Analysis decided to do a benefit-cost analysis of legalizing recreational marijuana. The discussion surrounding Issue 2 was perfectly aligned with this. Last month we released a cost-benefit study, which found that the current proposal is likely to lead to economic benefits surpassing costs by $260 millions.
The legalization of recreational marijuana in Ohio is not going to be free. We anticipate that impaired driving will lead to more accidents and deaths. The biggest impact is expected to be on productivity. We expect that recreational marijuana will cost $760 million in lost productivity based on our experience with other states who have legalized recreational cannabis.
The benefits of the programs that are funded by the excise tax levied against the industry will offset these costs. We estimate that if the Cannabis Social Equity and Jobs Fund and Substance Abuse Addiction Fund, authorized by Issue 2, are spent on programs based on research, they will provide benefits of about $800,000,000 in terms of job training and drug abuse treatment.
The economic impact of legalizing recreational marijuana could be affected by changing the way these funds are used.
Reallocating funds to policing would be a huge mistake from an economic perspective, as policing has been a poorly studied area of public policy. There has been very little research done on the economic impact of policing and even less work done on the economic costs and benefits of investing in prisons and jails, as some assembly leaders suggested.
The current evidence suggests that job training programs and drug abuse programs can provide benefits of up to $6 and $9 for every dollar spent.
Washington State Institute for Public Policy’s best evidence suggests that deployment of police may have more benefits than costs. Deploying officers can reduce property crimes by about $5 for every $1 spent.
This is one way of tackling crime. Another is to fund job training programs that reduce the value of crime in relation to regular employment.
The story is different when it comes to training. It is difficult to prove the benefits of new training for police. I conclude from this that reallocating funds currently allocated to job training and substance-abuse treatment towards police and jail construction is likely to reduce the economic effectiveness of marijuana legalization.
We can only hope that, if we reallocate money to programs that are effective, we will also allocate resources for evaluating the new programs they finance.
Rob Moore is the Principal of Scioto Analysis in Columbus, an analysis firm that specializes in public policy. Moore is a former analyst for the nonprofit and public sectors. He has analysed diverse issues such as education, economic development and environment. Moore holds a Master of Public Policy degree from University of California Berkeley’s Goldman School of Public Policy, and a Bachelor of Arts degree in Philosophy from Denison University.
This article was originally published by Ohio Capital Journal.
Top Wisconsin Senate Democrat Circulates Petition Calling For Marijuana Legalization Hearing In GOP-Controlled Legislature
Photo by Philip Steffan.
The article Ohio Lawmakers Plan to Redirect Marijuana Legalization Income Could Reduce Economic Efficiency (OpEd) first appeared on Marijuana Moment.
