Marijuana sales tax could swamp revenue dept. with cash

The Montana Department of Revenue (artist’s conception)

This spring, after Montana re-legalized medical marijuana, the legislature imposed a 4% sales tax. It is likely that much of the revenue from this tax will come in as cash. Because marijuana is still illegal at the federal level, banks that operate across state lines are reluctant to do business with dispensaries. Many providers can’t accept credit cards, much less set up business accounts to wire money to Helena. The question of how they will transport quarterly cash payments to the Department of Revenue has exciting security ramifications. Perhaps more exciting is the question of what Revenue will do with that cash once it comes in.

Speaking to the Billings Gazette, Deputy Director Gene Walborn predicted business as usual. He said his agency would “maybe [get] some cash counters and that kind of thing.” Revenue anticipates bringing in about $750,000. That figure is based on an estimate of 11,877 medical marijuana cardholders across the state—the average number in 2016, under the old law, when providers were limited to three customers apiece and forbidden from turning a profit.

Since I-182 lifted those restrictions, the number of cardholders has risen to 15,564. That’s a 31% increase in six months, during a period when dispensaries were just beginning to open up again. After the state’s first attempt at medical marijuana legalization, before the patient and profit limits went into effect, the number of cardholders peaked at 30,000. It seems like the Department of Revenue could get a lot more cash than it expects. Its plan to do nothing might have more to do with what’s easiest than with what conditions suggest.

In this way, Revenue is continuing a tradition. From the legalization that triggered a statewide boom in the last decade to the restrictions that abruptly shut it down in 2011, Helena has consistently done what it would about medical marijuana and considered the consequences later. You can read all about our state government’s steadfast refusal to plan ahead in this week’s column for the Missoula Independent.

While you’re there, check out this piece about the final legal bill for acquiring Mountain Water. When it first embarked on this project in 2014, the City of Missoula estimated that the legal cost of purchasing the city’s water system through eminent domain would come to $400,000. The city took ownership last Thursday, and its final legal bill was $7.4 million. That’s 19 times the original estimate. But that kind of thing happens when you’re doing business. It’s like when you buy a car for 15 grand but, after taxes and fees, the final price comes to $285,000.

In other news, my mother is in town, so this is the last Combat! blog you’re going to see until Wednesday. That’s a long time, right? I sure hope nothing happens in the news between now and then.

Medical device lobbyists sway Senate with relaxing truth massage

Artificial hip

Artificial hip

In 2010, the Affordable Care Act included a 2.3% tax on medical devices, designed to offset the cost of subsidizing health care for low-income families. Last week, the Senate voted 79-20 to repeal that tax in response to heavy lobbying by the medical device industry. Weirdly, 34 Democrats voted for repeal—many of the same senators who voted for the original tax. What a difference 30 months, several dozens lobbyists and one false cost estimate make. According to Bloomberg, the “reasonable assumptions” that the trade group AdvaMed used to estimate the cost of the tax “conflict with economic research, overstate companies’ incentives to move jobs offshore, and ignore the positive effect of new demand created by the law.”

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NC bill would outlaw sea level estimates

Downtown Durham

If you have a cat, make sure he is not sitting on your lap when you read this article about the North Carolina legislature’s plan to make exponential sea level projections illegal, lest the rage beam that shoots out of your face fill your home with the smell of burning hair. As everyone’s grandfather taught them, there are two ways to project future sea levels. One is to make an exponential model based on expected climate phenomena and rates of increase from recent years using math and scientists and stuff, and the other is to make a line graph based on sea levels from the last hundred years. As you might expect, the method that expects next year’s increase to be the same as in 1902 yields a much lower number, since it disregards global warming. “We’re skeptical of the rising sea level science,” says Tom Thompson, who just happens to be chairman of an economic development group representing 20 of North Carolina’s coastal counties.

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Arguing over facts: House health care bill cuts deficit by $130 billion, maybe

A rare un-photoshopped image of Nancy Pelosi. Seriously, Google her and try to find a picture of her head not on a dog's body.

The Congressional Budget Office released its preliminary assessment (caution: boring) of the House health care reform bill this morning, and the news is good: if all goes as planned, the Reconciliation Act to HR 4872 and HR 3590 will reduce the deficit by $130 billion in its first ten years. Notice that I say, “the news is good,” and not “the news is good for Democrats.” Finding out that a plan to improve the general welfare might actually save us a bunch of money is nice; if you like the idea of poor kids having medicine but don’t like the idea of the United States becoming a wholly-owned subsidiary of China, the CBO report should be a load off your mind. Of course, if you’re some sort of professional demagogue whose opposition to health care reform has been based on the supposedly enormous tax burden it will place on your audience, it puts you in a tough position. Theoretically, you should change your mind—deficits bad: health care bad, so now deficit reduction good: health care good—but that would feel uncomfortably similar to being wrong. No, when your position suddenly stops lining up with the facts, your only option is to change the facts.

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