Will Pot Taxes Make Mead Support Legalization?

by Wyoming Liberty Staff

Ever since Colorado decided to legalize marijuana there has been an increasingly intense discussion in Wyoming over whether or not the Cowboy State should go the same way. Some people have (for unclear reasons) confidently, consistently, told us that it can never happen here. However, as I explained last year, whenever there is the prospect of a new tax, anything can happen, even in Wyoming. Alas, from KGAB:

Governor Matt Mead is creating a council to gauge the effects of marijuana usage in the state ahead of a legalization initiative that could go before voters next year. Mead announced Tuesday he's putting together a marijuana impact assessment council. He wants it to report to the public on effects of marijuana before the Legislature convenes early next year. Activists this spring filed initial paperwork to start a petition process in Wyoming that could put a medical marijuana legalization measure before voters in the 2016 general election.

The governor is a former federal prosecutor and so far says he is opposed to legalization. However, he would not be putting this panel together if he were not worried about either of two things: that voters could approve legalization or that the ditch where the state budget is heading is so deep that the state won't get back on the road again.

If the governor is worried about voters approving legalization, then it means he has opinion polls or other credible information that points in that direction. Furthermore, the legalization initiative comes with big promises of big taxes: up to 25 percent sales tax and up to 15 percent excise tax.

As an opponent of legalization I have to hand it to NORML, the organization behind the legalization initiative. By including the prospect of big tax revenues they appeal to state lawmakers in cash-strapped states (Wyoming will soon be one of them) as well as citizens who normally would not support legalization but who feel that it is a responsible decision if it leads to more money for government services.

Which brings us to the governor's concerns over the state budget (and I am confident that he is worried about the structural deficit). With severance tax revenues growing at a fraction of the rate of state spending, and with forecasts giving no hope of a return to the heydays of double-digit revenue growth, the governor faces a situation where he could leave office in 2018 with a state budget in much worse condition than when he took office. No governor wants that on his resume.

So long as the governor is opposed to legalization of marijuana the prospective tax revenues from pot sales in Wyoming will not help the state budget. But the closer we come to an unmanageable situation with persistent deficits in the hundreds of millions, the more easily opponents of legalization will change their minds. It is not entirely impossible that Governor Mead has appointed his evaluation group to come up with an answer that allows him to change his mind.

It would be ironic if Wyoming legalized pot just to save big government. A state that prides itself of being conservative and freedom-loving already today has one of the nation's biggest combined state and local governments; the same conservatives who believe that Wyoming is a small-government state also want this to be a socially responsible state.

Maybe, in the end, legalization will fail (personally I hope so). But the very fact that the governor is worried is a sign that the legalizers have a momentum, and that they very well could come out victorious in 2016.

There are far better ways to prevent a deficit disaster in the state budget than to have government trawling for revenue in morally muddy waters. For one, try a structured exit out of big government.