By DEBRA HAIGHT
BCR Correspondent
BUCHANAN – With last week’s press release about the latest state recreational marijuana revenue payments to local communities, people are once again debating the pros and cons of how the marijuana revenue is being divided up between communities and counties.
Michigan voters approved a ballot initiative legalizing adult use marijuana in 2018 and a number of communities here in Southwest Michigan and across the state began setting up the framework to welcome recreational marijuana businesses.
The cities of Buchanan and Niles were among the first in Berrien County to have adult use marijuana businesses open and the first to reap the revenue. Since then, the city of Benton Harbor and the villages of Eau Claire and Three Oaks have also approved recreational marijuana businesses with Benton Harbor now having one business up and running.
The press release last week from the Michigan Department of Treasury reported that more than $42.2 million in adult use marijuana excise tax revenue will be distributed to 163 municipalities and counties around the state. That distribution is in accordance with the Michigan Regulation and Taxation of Marijuana Act.
Besides the excise tax revenue going back to municipalities and counties, the act cited above calls for excise tax revenue to also go to the School Aid Fund and to the Michigan Transportation Fund. The school aid and transportation funds will each get $49.3 million from the excise tax revenue.
All those numbers are up from last year. In March, 2021, the state announced the distribution of nearly $10 million to more than 100 municipalities and counties in the state. Municipalities and counties received payments from the Marihuana Regulation Fund for every licensed retail store and microbusiness within their jurisdictions.
The state reported last week that three cities in Berrien County will be getting money from the 2021 excise tax revenue. They are Benton Harbor which will be getting $56,453 for one business with a license, Buchanan which will be getting $282,267 for five businesses and Niles which will be getting $169,306 for three businesses.
In addition, Berrien County will be getting $508,080.96 in 2021 excise tax revenue, an amount equal to the combined revenue going to the three cities. Nearby Cass and Van Buren Counties are getting $225,813 for four licenses and $564,534 for 10 licenses respectively.
It’s the fact that counties receive as much money as municipalities for what one area resident described as “doing nothing” that has again come up for debate. The issue was also raised at a recent Berrien County Board of Commissioners meeting.
County Commissioner Mamie Yarbrough represents the city of Benton Harbor which is getting state marijuana revenue for the first time. “Of the 15 percent excise tax charged to cannabis dispensaries, 7.5 percent goes to the county and the rest to the city, what does the county do with that money coming from Benton Harbor,” she asked.
“We had this conversation nine to 12 months ago about the marijuana tax revenue coming into the county,” County Administrator Brian Dissette said.
“We had Buchanan city officials ask us to redirect the money back to them because they should reap the benefit since they did the rezoning and the other work to bring in the businesses,” he added. “A majority of the board said that it was county revenue that we could use anyway we wished and it was decided to have it go into the general fund.”
“There was discussion about partnering with local entities on park and other projects,” he said. “But it was viewed generally as a new revenue stream to flow into the general fund. It is free and clear money and an undesignated revenue source that we have flexibility in how to use.”
County Board Chairman McKinley Elliott noted that the state law specifies how the marijuana taxes are collected and distributed. “We get the money because the legislature said some should go to the counties,” he said.
He suggested the possibility of giving some matching dollars to the local municipalities to help fund public health initiatives such as ones for treating addictions and abuse.
Buchanan resident and business owner Alan Robandt has a different take on the matter. He recently wrote a letter to the editor to area newspapers asking the county board to reconsider its position on what to do with the excise tax revenue the county receives.
His view is that the windfall the county is getting should be spent in the communities that took the chance on recreational marijuana. While addressing the entire county board, he specifically singled out Elliott, Yarbrough and Michael Majerek who represents the city of Niles.
“The Berrien County Board of Commissioners needs to address the Michigan cannabis excise tax it is receiving from Benton Harbor, Niles, and Buchanan,” he wrote. “I’m writing as a Berrien County taxpayer, and more specifically, as a City of Buchanan resident.”
“In November of 2018 Michigan voters approved the legalization of adult cannabis use by a referendum margin of 56 to 44. A few lower income cities opted into the program recognizing its potential for economic development, permit revenue, and excise tax participation.”
“These cities were Benton Harbor, Niles, and Buchanan. Last year, Niles and Buchanan received $56,002 and $84,004 respectively. Berrien County, not because of any support for this industry or these communities, received $140,006.”
“This year the stakes are much higher,” he noted. “Benton Harbor joined the list of opt-in communities. The excise tax generated by dispensaries: Benton Harbor $56,453, Niles $169,360, and Buchanan $282,267. Berrien County, for doing nothing, is receiving $508,081.”
“The Berrien County Board of Commissioners and particularly Mac Elliott, Mamie Yarbrough, and Michael Majerek need to begin a dialogue with the cities in their districts that have generated this windfall for the County. The money should be spent within these cities — period.”
“Had the County and its leaders taken an active role in the development of this industry, there might be an argument to support County wide use of the funds. They didn’t and there isn’t. For the County Commissioners from areas considering opting-in or with substantial grow or processing facilities planned, please consider the precedent you will set as you act on this question of an appropriate distribution of excise tax revenue.”
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