Pueblo County voters made history this week when they passed Pueblo County Ballot Initiative 1B, which creates college scholarships with tax proceeds from legal marijuana sales. It is apparently the world’s first program funding college scholarships with marijuana tax revenue.
Beginning in 2017, every high school graduate from the city or county of Pueblo will automatically be eligible for a college scholarship created by Pueblo County’s new marijuana excise tax fund.
The excise tax in the county and Pueblo West will be incrementally increased starting at 1 percent each in 2016, according to Pueblo County Commissioner Sal Pace, who said the tax will max out at 3 percent in Pueblo West in 2018 and 5 percent in Pueblo County in 2020.
“It’s due time that we make college affordable for everyone in our community,” Pace said.
The ballot measure proposed a 5 percent excise tax on recreational marijuana grows from Pueblo County and that on an annual basis, no less than 50 percent of the revenue of the excise tax shall be placed in the cash fund for the purpose of providing college scholarships to all high schools in the city and county of Pueblo.
These scholarships are not full-ride scholarships and are limited to Pueblo graduates attending a Pueblo college or university beginning in fall of 2017. Any student graduating from a high school located within Pueblo County and the city of Pueblo, who have been admitted to colleges and universities located within Pueblo County and will be attending those schools the succeeding fall, are eligible for the Marijuana Excise Tax Scholarship. Scholarships will be awarded equally to all eligible students.
“We are uncertain to the total amount that the new tax will generate,” Pace said. “If we are 20 percent of the statewide market, then the tax will generate more than $1,000 per student per year.
The program may be expanded in future years depending on revenue.
“The marijuana excise tax is expected to generate up to $3.5 million (at 5 percent) according to TABOR estimates,” Pace said. “If Pueblo County comprises 20 percent of the statewide market and the average wholesale price remains consistent, then it would generate $2.5 million at 5 percent.”
According to the Colorado Department of Education, Pueblo’s school districts 60 and 70 graduated 1,389 students in 2014.
“Roughly 400 of these students attended a college in Pueblo. We’re hoping these scholarships will help motivate Pueblo’s youth to graduate high school, by alleviating some of the problems of college debt,” Pace said. “The requirement the scholarship must be redeemed at a Pueblo college or university will also help alleviate some of the additional costs of living accumulated from moving away from home to attend a college or university. These scholarships will help Pueblo’s youth graduate with degrees with lower college debt.”
When asked if there is a concern regarding federally funded colleges refusing to take marijuana scholarship students, Pace said no.
“Pueblo County receives tens of millions in federal dollars already. The state of Colorado receives billions of federal dollars. The state actually directly funds schools with marijuana money. Neither government has lost any federal dollars by co-mingling with marijuana revenues during the past five years,” Pace said. “However, Pueblo County could consider contracting the scholarship program administration out to a nonprofit that already provides scholarship programs, which could further alleviate these concerns.”
In addition to providing scholarships, the remainder of the excise tax revenue will be used on projects to improve the Pueblo community. The identified projects in the measure must be completed before any other expenditures are made from the excise tax revenue. The named projects included:
- Colorado State Fair streetscape refurbishment
- Medical marijuana academic research and marijuana impact grant
- Feasibility study tocConnect Amtrak’s SW Chief to Pueblo
- Safe Route to Schools: North Mesa, South Mesa and Sage Elementary & trail master plan
- Pueblo Historic Courthouse dome refurbishment
- Confluence Park County Outdoor Recreation Pavilion
- U.S. Highway 50 feasibility study
- Arts Center funding for long-term planning feasibility studies and development of the atrium between Helen T. White and Buell Children’s Museum
- Replace carts and expand clubhouse at Desert Hawk Golf Course in Pueblo West
- Beulah Elementary School playground enhancement
- Pueblo Reservoir bike and hiking trail repair, trail sign improvements
- Create Pueblo County Energy Efficiency Department and solar improvements
- Zinno Water District area water supply needs
According to Pace, Pueblo County is hoping to complete these projects over the course of the next 10 years. The list of 15 projects that will be funded by the Community Development Fund was recommended as priorities by the Pueblo County Facilities Department.