There’s a bright spot in Portland's annual budget: higher-than-anticipated revenue from cannabis taxes.
But three years after voters approved the 3% tax, City Council is still trying to agree on how to spend it.
The ballot initiative gave the City Council authority to spend cannabis tax money on a few broadly defined priorities: drug and alcohol education and treatment; public safety and street safety including protecting the public from unsafe drivers; and support for small businesses and economic opportunity for communities impacted by cannabis prohibition.
Last year, the City Council allocated the biggest chunk of ongoing revenue, $2.15 million, to the Portland Police Bureau’s traffic division — a move that’s sparked controversy.
As a report from the city auditor recently pointed out, that new funding didn't put more traffic cops on the street. Instead, the Council cut its general fund support for the traffic division and substituted the cannabis money.
The city’s general fund is the repository for most taxes, licensing fees and unrestricted revenue that funds core services like police, the fire department, parks and planning.
Commissioner Chloe Eudaly, who voted to adopt that budget last year, said she hadn’t fully understood the substitution maneuver and believed that the cannabis dollars would be used to expand the city’s traffic safety work.
At a City Council budget work session Tuesday, Eudaly asked a lieutenant with PPB’s traffic division to clarify how many new people they’d been able to hire. The answer: zero.
“I want to see an actual increase in enforcement, and I’m disappointed that these dollars didn’t deliver that,” she told her colleagues.
Commissioner Amanda Fritz, who led the Council’s push to pass the cannabis tax in 2016, defended the decision to support the ongoing work of the traffic safety team. As the city’s costs grow, she said, it needs to find new ways to support general fund programs.
“The ballot measure specifically did not say that we could not backfill,” Fritz said. “We intentionally left it up to the Council to decide that. Many other jurisdictions who passed the 3% tax just had the money all go to the general fund.”
The auditor’s report also noted that while the ballot measure specified three priorities, virtually all of the funding to date has gone to public safety.
Small business and social justice effects received only 16% of the revenue, and drug and alcohol programs received 5%.
The mayor’s proposed budget for 2019 largely continues the lopsided distribution of cannabis dollars, with about $5 million for traffic enforcement and street safety improvements, $500,000 for drug and alcohol treatment, and $527,000 to support small businesses through the city’s economic development agency, Prosper Portland.
The budget includes $700,000 in unspent carryover for the community grant program that has supported record expungement. Another $759,000 in one-time surplus revenue hasn’t been allocated by the mayor and is still available for the Council to spend.
Commissioner Jo Ann Hardesty questioned why the Council wasn’t prioritizing spending the tax revenue directly on record expungement and other opportunities for people who have been harmed by drug prohibition.
“I’m concerned. Today, we have marijuana businesses where white men are making small fortunes daily,” Hardesty said. “It just feels like we’re once again not focused on the people who’ve been harmed by our public policy. Here we have an opportunity to do good, and we are not even talking about the people who have been most impacted.”
Eudaly said she supports allocating more of the fund’s dollars toward social justice initiatives. The Office of Civic Life, which she oversees, has proposed creating a five-person commission to advise the Council in the future on how to spend the cannabis tax.