Marijuana and liquor a puzzle
for Washington revenue forecast
on November 15, 2012 at 11:59 AM, updated November 15, 2012 at 12:03 PM
By Kari Bray
The Oregonian/Murrow News Service
OLYMPIA — Alcohol and marijuana are presenting a numerical challenge for Washington revenue forecasters.
The Washington Economic and Revenue Forecast Council is predicting about $32 billion in General Fund State revenue for the 2013-15 biennium, but that does not include any money from potential marijuana sales and does include a lot of uncertainty about liquor revenue.
Liquor sales revenue in the November calculations came in at $2.2 million, or about 5 percent, higher than the September forecast. This could indicate a positive trend in revenue or simply a jump on a highly variable line for liquor sales, according to the ERFC.
“Liquor has continued to be really, really volatile,” ERFC Director Steve Lerch said.
During the past five months, the year-over-year change in liquor sales has ranged from up about 15 percent to down nearly 10 percent.
“This continues to be challenging from a forecasting perspective,” Lerch said.
The impact of a state marijuana industry is another huge wildcard for forecasters.
Initiative 502– which holds 55.5 percent of the statewide vote – is designed to create a marijuana industry that will license and regulate distribution, tax sales and specifically prohibit driving under the influence of marijuana. However, federal law maintains that marijuana is a controlled substance and therefore subject to penalties for growing, selling or possessing and using the substance.
Lerch said the result of this push-and-pull between federal and state law means the impact could be “zero to a lot of money.” The council is waiting until there is more certainty about the implementation of the initiative to make any numerical assumptions.
“Because of the uncertainty surrounding Initiative 502 – the marijuana initiative – we have not assumed any new revenue in this forecast,” he said.
The Office of Financial Management’s I-502 fiscal impact statement estimates that revenue generated from a fully-functioning in-state marijuana industry could be as high at $1.94 billion over the next five years. However, due to the high level of uncertainty regarding federal law and final results of implementation, the lower bound of the possible revenue is simply “non-zero.”