Show Me the Green: Will Illinois Be In Better Financial Shape After Marijuana is Legalized?

By Mohammad Samra

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The sewers in Palos Hills fail to keep rainwater from flooding the streets, one of the many problems that can be resolved with extra revenue from recreational marijuana sales. Photo by Mohammad Samra.

42-year-old teacher Illiana Elayan sifted through the practice standardized test scores of her students at Ridge Lawn Elementary school. Elayan was concerned with the low scores she was seeing, and her students were struggling mightily – mostly because they lacked resources to fully understand what was expected of them.

Elayan believes that revenue from legalizing marijuana should be used to hire additional teachers, promote smaller classroom sizes, increase access to technology and provide extracurricular activities. She wants student growth to be the top priority.

“Extra revenue to benefit standardized test scores would be supplemental,” Elayan said. “Students, in my opinion, should not be seen as a standardized test score…the revenue should be used to help captivate and promote student growth.”

On Jan. 1, 2020, marijuana will become legal statewide in Illinois. State residents age 21 and over will be able to possess up to 30 grams or about 1 ounce of flower, 5 grams of cannabis concentrate or 500 milligrams of THC in products that contain marijuana such as gummies. Visitors in the state may possess up to 15 grams, according to the Chicago Tribune.

Illinois will generate an estimated total of $525 million in combined marijuana revenue and boost the Illinois economy by $1 billion annually, according to a report by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign. The report also states that by legalizing marijuana, Illinois taxpayers would save $18.4 million in reduced incarnation costs, legal fees and law-enforcement spending.

The report also suggests that the extra revenue may be used to make “vital public investments” into K-12 public schools, college tuition assistance programs and drug treatment and prevention programs.

Governor J.B. Pritzker proposed a $39 billion tax budget that would rely on the taxation of marijuana sales and sports gambling to help get Illinois out of its $134 billion pension debt, according to Patch. Pritzker also noted that he would add $375 million to public education funding for early childhood education and universities as well as increase security with more Illinois State Police troopers.

“Excise taxes should only be used to offset the negative externalities associated with exchange in a free market,” said Hans Zigmund, a former Illinois policymaker who is now finance director for the State of Alaska. “The revenue should be used to fund programs related to drug addiction or other related health risks. The program in Illinois used to be called ‘Drug, Alcohol and Substance Abuse’ (DASA)…Tax money should also fund grants to non-profits that do outreach and treatment for drug addition or secondary effects such as homelessness.”

Many Illinois residents such as the Rev. Michael Pfleger believe that the extra money generated should be used to help impoverished neighborhoods.

“The city, state and federal government must make a top priority for investment and opportunity in the most neglected neighborhoods, or we are simply band-aiding the problem,” said Pfleger, an activist leader in Chicago.

Pfleger believes that the revenue should “even the playing field,” and should be distributed based on the needs of a community. He also believes the type of training police are given should change, now that there may be funds to spare for that area.

“I believe there is plenty of money targeted for police, it’s the type of training and eradicating that military-like culture that needs to change,” Pfleger said.

City officials in Evanston put together a reparations plan that will benefit all African-Americans living in the town, according to the Rockford Register Star.
According to U.S. Census Bureau data, 16.9% of residents in Evanston identified as black – making it one of the largest black communities in the North Shore suburbs. Over a three-year-period, 71% of those arrested for possessing marijuana were black, according to data from city officials.

Evanston’s city council voted 8-1 on Nov. 25 to implement a 3% tax on marijuana that will be used to fund the reparations plan – with a cap of $10 million over the next 10 years. The city expects to generate between $500,000 and $750,000 each year for the fund from its three dispensaries, according to the Star.

“If revenue does not go toward education, I would like to see it go toward social reform,” said Elayan, who’s been teaching for 20 years. “Invest time and money into the people in juvenile detention centers and prisons. Understand and develop awareness about mental health, which include facilities and individuals who can help.”

While towns like Evanston are welcoming the change with open arms, other areas in Illinois are not as eager for the law to go into effect at the beginning of the year – which can have financial consequences on the extra revenue the state is expecting to generate.

Naperville City Council members voted 6-3 in September to opt out of recreational marijuana sales within city limits, according to the Naperville Sun. Residents of the city who asked the council to opt out were concerned about dispensaries leading to increased availability to children, thus, hurting the town’s “family-friendly” brand, according to the Sun. If towns and cities throughout Illinois follow in Naperville’s footsteps, it may cost the state millions in potential revenue.

Mayor Lori Lightfoot’s zoning proposal for Chicago may also negativity impact potential revenue. According to the Tribune, Lightfoot proposed that the city be divided into seven zones that would be allowed up to seven dispensaries, with an increase to 14 in May. However, dispensaries would be prohibited from operating downtown, arguably the most populated area in Illinois, causing potential resistance from those like Ald. Brendan Reilly, 42nd, who wants dispensaries in the area “to make sure Chicago collects as much cash as possible,” according to the Tribune.

Although the sale of recreational marijuana becomes legal in a matter of weeks, many dispensaries won’t have a sufficient enough supply to keep up with demand for the products. According to the Tribune, Illinois law requires that dispensaries ensure there are enough medicinal marijuana for patients. Any dispensary that can’t provide a patient with the product could face fines up to $10,000, prompting locations to limit how much customers can buy.

Nearly 946,000 Illinois residents will become potential consumers on Jan. 1, while almost 11 million visitors are expected to legally purchase marijuana, according to a study commissioned by Illinois lawmakers and conducted by Freedman and Koski.

The number of patients in the state’s medical marijuana program continues to grow – roughly doubling in the last year. While facilities like PharmaCann are more than doubling production, the increased capacity of goods won’t be out for public consumption until mid-2020, and cultivation licenses won’t be given until 2021, according to the Tribune.

At Oakton Community College, students are taking courses that focus on the knowledge and understanding of marijuana, according to the Tribune. Although federal law prohibits college students from working directly with marijuana, the students’ completion of the course will provide qualified workers to fill the rapidly growing field of the recreational marijuana industry.

How the legalization of marijuana in Illinois will affect the state’s economy is uncertain, and while many state citizens have different ideas as to where the money should go, they all agree that it should be used effectively.

“The money should not go to pay for general fund expenditures, capital projects or debt service,” Zigmund said.

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