What would Virginia do if it had an extra $1 billion in revenue?
OK, that’s an easy one, right? Democrats would want to spend it, and Republicans would want to cut taxes. That’s generally true, of course, but Republicans would surely find some things they’d like to spend it on, and Democrats could likely find some regressive taxes they’d like to cut.
The real question, though, is how would Virginia suddenly get an extra $1 billion? Hold that thought.
Over the weekend, Attorney General Mark Herring did something that once would have been unthinkable in Virginia: He called for legalizing marijuana. Technically, what Herring said —in the form of an op-ed in the Daily Press in Newport News — is that “Virginia should decriminalize possession of small amounts of marijuana, address past convictions, and start moving toward legal and regulated adult use.”
Herring understands that change often comes incrementally, in Virginia most of all. The goal of decriminalizing small amounts of marijuana isn’t that radical. After all, the top Republican in the state Senate — Senate Majority Leader Tommy Norment, R-James City County — proposed the very same thing in 2018. However, the bill he actually introduced in last year’s General Assembly didn’t quite do that. It kept possession of small amounts of marijuana as a criminal offense, but would have eliminated jail time as a potential punishment. Instead, first-time offenders would have been subject only to a fine of up to $500 and have a chance to have the offense expunged from the records.
Those who wanted full decriminalization — to make marijuana possession simply a civil offense similar to a traffic ticket, not a criminal one — were disappointed, but Norment understands incrementalism, too. A spokesman said that Norment didn’t introduce a full decriminalization bill because he didn’t think it would pass. Norment was right, because not even his scaled-down bill simply to reduce the penalty passed. It passed the Senate by a rather eye-popping 38-2, but died in the House Courts of Justice Committee. If not even a powerful Republican can get his bill to reduce criminal penalties through a Republican General Assembly, then a bill to remove them altogether will have a tougher time getting through, although there does seem to be growing sentiment in both parties that the time is coming to do so. Actual legalization, well, that might take longer — and involves a different kind of debate.
The argument for decriminalization is basically: Yeah, smoking pot is illegal, but it isn’t that big a deal. Norment said he has grown concerned that a marijuana conviction gives people a criminal record that hurts their job prospects later in life. “That can follow you forever,” he said in 2018. “I represent a lot of young people, a lot of college students. I’m looking to give some of these people a hand, provided they do what they’re supposed to.”
Herring framed his call much the same way, just with more of a social justice context: The current law, he said, “is needlessly creating criminals and burdening Virginians with convictions. . . And it cannot be ignored that the burden of the current system falls disproportionately on African Americans and people of color. The Virginia Crime Commission found that African Americans comprised 46% of all first offense possession arrests from 2007 to 2016, despite comprising just 20% of Virginia’s population and despite studies consistently showing that marijuana usage rates are comparable between African Americans and white Americans.” What an attorney general proposes, though, has more impact than what a mere legislator, even a powerful one, proposes. Herring has been elected statewide — and wants to be elected again, as governor in 2021. Herring’s proposal does three things:
1. It gives him an issue that he hopes will energize younger voters, who tend to be more in favor of legalization.
2. It’s now reasonable to ask every General Assembly candidate this fall how they feel about both decriminalization and legalization, the answers to which might produce unpredictable reactions from candidates and voters alike.
3. It’s also reasonable to ask what might happen if Virginia ever did legalize marijuana. That’s where the $1 billion comes in.
Colorado announced last week that it’s now pocketed $1 billion in state taxes since the state legalized marijuana in 2014. Virginia is bigger than Colorado — we have 8.5 million people, Colorado has just under 5.7 million — so in theory we ought to produce even more marijuana tax revenue. (Yes, yes, there are details to be considered here: Would the tax rates be the same? Would Virginians toke up at the same rate Coloradoans do?)
Now, a billion of anything gets attention, and it’s taken Colorado five years to get to that point. A better measure is to look at marijuana tax revenue on an annual basis.
When you look at things that way, Colorado took in $266.5 million last year. Washington state — which at 7.5 million people is closer to our size — took in $319 million. The question of whether to legalize marijuana is a lot bigger than tax revenues, of course, but it’s the easiest benefit to measure objectively. Let’s suppose that Virginia replicates the Washington state experience and pocketed $319 million a year in marijuana taxes. What’s that equal to? It’s not much compared to Virginia’s income tax revenues, which top $14.1 billion, or sales taxes, which bring in nearly $3.5 billion. So even if every penny of marijuana tax revenue were devoted to reducing income taxes, you might not notice much of a difference. But you could notice it in other ways. The tax on deeds brings in $380 million a year, so marijuana taxes could offset most of that, if legislators were so inclined. Or it would more than cover the $250 million that Gov. Ralph Northam proposed be refunded to people who filed for the earned income tax credit, a proposal that went nowhere in the legislature.
On the spending side: That $319 million is more than the $280 million that Virginia will generate from the tax increases for transportation that the legislature approved this year (with $150 million of that targeted for Interstate 81). Legislators who opposed that plan (which included most of the Republicans along I-81) could conceivably call for repealing those taxes and legalizing marijuana instead — and still have $39 million left over. We don’t expect that to happen, of course.
Not this year anyway.