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| Legalized Pot Would Save Money |
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Posted by CN Staff on April 17, 2005 at 07:38:09 PT By Dick Startz, Special To The Bellingham Herald Source: Bellingham Herald 
Washington state would save about $105 million a year if we legalized marijuana. Economics isn't the first issue that comes to mind when talking about illegal drugs, but perhaps we can talk about the economic aspects of marijuana without tempers flaring. Let's talk numbers first, and then bring a little economic theory into the discussion. The $105 million figure comes from a study by Boston University economist Jeff Miron. Miron put together two numbers: the savings to government from not locking people up for marijuana-related offenses, and the increased revenue from taxes we could collect if marijuana were treated just like coffee or chocolate. Most of the money, about $88 million a year, comes from the reduction in law enforcement costs. Locking people up is expensive. About one in 20 arrests in Washington is for marijuana use or sales. Using this number and the average cost per arrest for police, prosecution and incarceration, Miron computed Washington marijuana enforcement costs are about $88 million. Of course, many marijuana busts are incidental to arrests for some other violation. In such cases, the marijuana arrest doesn't really cost anything extra - the arrest was going to happen anyway - so Miron did the best he could to exclude any cost savings from these multiple-arrest arrests. The rest of the $105 million comes in the form of collecting taxes on the production and sale of marijuana. This $17 million is a softer number than the $88 million because there aren't good state-by-state data on marijuana production and consumption. So $17 million is a conservative guesstimate. There's some evidence that marijuana use is a little higher in Washington than the national average. If so, state revenue might pick up another $5 million a year. However, tax revenue could be even higher. Miron assumed a standard sales tax level in his estimate, but Washington imposes very high "sin" taxes on tobacco and alcohol. If we did the same for marijuana, tax revenue might well increase by $35 million or $40 million, rather than "only" $17 million. Turning from numbers to ideas, the key to understanding what economic theory tells us about marijuana legalization is the word "substitution." When we prohibit marijuana, people make one of three decisions: they use marijuana anyhow and risk getting caught; they spend the money that would have gone for pot on something relatively innocuous, like chocolate or lattes or booze; or they spend the money on harder drugs. In other words, people "substitute" something else in place of marijuana use. The question is, if we chose to make marijuana legal again, what would pot replace? An intriguing possibility is that if we legalized marijuana while keeping the rules against meth and crack, a fair number of people might get the feeling they want from pot - which is pretty safe - and stay away from really dangerous drugs. Call the substitution of marijuana in place of harder drugs a "reverse gateway" effect. My two most faithful readers are my teenage daughters. The first reason I tell my girls to stay away from marijuana is that when you buy pot you risk associating with people who sell some much nastier things. Not every casual dope seller is an evil fiend, but if you buy dope regularly you're eventually going to end up around some not-real-high-class folks. An extra $100-plus million would be nice for the state budget. But an even better economic argument for legalizing marijuana is that it would move the legal line, so that relatively safe drugs like caffeine, alcohol and marijuana are all on one side of the law and the truly dangerous drugs, such as crack and meth, are on the other. Dick Startz is Castor Professor of Economics and Davis Distinguished Scholar at the University of Washington. Source: Bellingham Herald (WA) CannabisNews -- Cannabis Archives Home Comment Email Register Recent Comments Help |
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| Comment #4 posted by ekim on April 17, 2005 at 21:22:45 PT |
| The $105 million figure comes from a study by Boston University economist Jeff Miron [ Post Comment ] |
| Comment #3 posted by ekim on April 17, 2005 at 21:17:04 PT |
| ok
seem to have reached the Heinz variety with half of that and seven more for usen. sound mind and body. please// so this will stop. http://www.cannabisnews.com/news/thread20521.shtml#1 Earth day Fri is coming pick your favorite story and print out 25 copies and post them at coffee or tobacco or bar or co op or eat joint or newspaper or a million other places to let others know -----soon American grown Cannabis will bring new jobs and opportunities for all who can imagine. amhighsrbush says no to gmos if state allows growing of rice. i sincerely hope that the mpp will have Dick Startz is Castor Professor of Economics to the gala. LOS ANGELES, CALIFORNIA -- The Marijuana Policy Project is pleased to announce the talent line-up for their 10th Anniversary Fundraising Gala in Los Angeles on May 9, 2005 at the Sheraton Delfina Hotel in Santa Monica. Tickets are available at www.mpp.org/galas or by calling Blue Room Events at 310-491-1401. The event will be celebrate MPP's victories over the past 10 years and commemorate the progress of the entire marijuana policy reform movement. [ Post Comment ] |
| Comment #2 posted by freedom23 on April 17, 2005 at 16:45:53 PT |
| The first state to legalize marijuana will win and win big. With most states running in red ink, someday people are going to stop listening to the LE propaganda and their "the sky is falling" attitude towards marijuana. Look at legalized gambling: Nevada was the first into race and as other states joined they adapted. Result: Nevada is making more in taxes on legalized gambling than all the other states combined. Whatever state legalizes it first will see a big influx in tourism while the others "play it safe". BTW, while legalized gambling has created some problems it has also fixed some like a decrease in loansharking. Take Cape Cod for example. For a long time it was a place where the residents made their money off of tourism. In the early 1970s came a huge building boom and the year round population exploded. Housing starts also skyrocketed. More and more people became year round residents to support the building trade. In the late 1980s building slowed way down and unemployment went up. The problem was compounded by a pricey home market where an average single salary couldn't come close to buying a starter home and rentals were more than most mortgages. Now imagine that MA legalizes marijuana and taxes it at roughly $1USD per joint selling it at liquor stores and hotels (exclusively to their guests). Hotels and resorts would have "coffee bars" for their guests where there's no driving, no hassle, just people hanging out (say on the beach) and enjoying life. Vacationers in the summer, conferences in the spring and fall. IMO this would revitalize their tourist based economy which has barely been surviving. More demand for rooms equals higher rates and a demand for more staff. Not to mention the added benefit to the State with less prisoners in jails and less LEOs to arrest said people. IMO, once one states makes it legal many more will follow in time but the big winner will be the first. Fortune and luck favor the bold and swift. [ Post Comment ] |
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Comment #1 posted by stoner spirit on April 17, 2005 at 14:06:12 PT:
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| I hope our leaders have gotten this message, and I hope they legalize it. I want to be able to go to the store and spend my twenty dollars on some marijuana, besides my coffee. [ Post Comment ] |
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