Audit: Portland's Recreational Cannabis Tax Revenue Goes Mostly To Police, Transportation

By Meerah Powell (OPB)
May 2, 2019 7 a.m.

When Portland voters approved a 3% tax on recreational cannabis sales in 2016, they expected the funds would benefit marijuana business owners and individuals who were negatively affected when cannabis was illegal.

A report from the Portland City Auditor reveals that's not the case. Instead, most of the collected taxes have gone toward shortages in the city's general fund and specifically to police and transportation programs.


Although the uses are technically allowed under the ballot measure, cannabis business owners and community members have not been involved in budget decisions and the city has not reported on how it has used those tax revenues, according to the audit.

The ballot measure stated that the marijuana tax revenue should go toward three categories: drug and alcohol education and treatment programs, public safety investments aimed at protecting the community from unsafe drivers and support for neighborhood small businesses — especially those owned by women and people of color.

Proponents of the tax called the categories “intentionally broad,” the report said, “with no defined allocations, to meet changing community needs and future priorities.”

Tax revenue of $3.6 million in the 2018 fiscal year and $4.6 million in 2019 primarily went toward public safety. Small business/prohibition effects received only 16% of the revenue and drug and alcohol programs received 5%.


In the public safety category, tax revenue funded traffic safety enforcement personnel, officer training related to driving under the influence and other safety enhancement activities such as those related to Vision Zero — the Portland Bureau of Transportation program seeking to eliminate fatal traffic incidents.

For small businesses, Portland City Council allotted $1.2 million toward grant programs in the past two fiscal years.

“The grants for the first year have been awarded to fund development of minority-owned cannabis businesses, workforce development and criminal records expungement,” the report states. The award is still in process for the second year.

The report also calls that grant system “unclear.”

As for the drug and alcohol treatment category, the council allotted $410,000 to the Portland Police Bureau’s Service Coordination Team in the 2017-18 fiscal year. That team assists repeat drug and alcohol offenders in finding access to treatment and housing services.

The report also states that the Portland Police Bureau could not provide any data on marijuana-related safety concerns, “such as traffic stops for driving under the influence of cannabis.”

While the allocation falls within the three categories stated in the ballot measure, the City Auditor’s report calls for more transparency and accountability from the city in its spending of the tax revenue.

“Voting on recreational cannabis tax allocations as part of the overall city budget, with no separate opportunity for comment or description of how the funds will be used, leaves community members with no way to influence the allocation decision,” the report states.

The marijuana tax revenue is only expected to increase. The City Budget Office forecasts a $4.7 million tax revenue in the current fiscal year.