Pennsylvania has a budget problem. Could this legislation solve it?
Last week, bad news broke out of Harrisburg. Thanks to COVID-19 and prior bad policymaking, "The state finished the 2019-20 budget $3.2 billion, or 9.1 percent, below its expectations, collecting $32.3 billion in general fund revenues, according to state Department of Revenue data made public on Wednesday."
Undoubtedly, this will result in calls for higher taxes from Pennsylvania Democrats (despite the fact that this will mean charging a shrunken pool of people actually making money, or consumers with money to spend, more when it's not clear the economy is going to rage back to where it was pre-COVID-19).
There's an alternative solution that is being mooted, though, and which could get bipartisan support: Legalize marijuana in the Keystone State.
Yes, this sounds like one of those "quick and easy solutions" that won't actually deliver. But right now, Pennsylvania needs extra cash and word is that some Republicans who previously were on the fence about it may be warming up due to one prominent anti-tax group taking a favorable position on the legislation.
KeePENNItReal is able to exclusively report that Grover Norquist's Americans for Tax Reform will not consider a vote to legalize, and then tax, marijuana in Pennsylvania to be a violation of the Taxpayer Protection Pledge.
That overcomes a major obstacle in persuading Republicans to support legalization, as many of them previously worried that a vote to legalize, and tax, cannabis would be interpreted as a vote to hike taxes - a politically risky move, to say the least.
How much would legalization bring in? According to the Auditor General of Pennsylvania, as of 2018, more than $580 million. But judging by numbers out of Colorado, Washington and Nevada, the number could be far higher. Here are some figures compiled by political consulting firm Mair Strategies, using data compiled by the Institute on Taxation and Economic Policy.
So, potentially Pennsylvania could bring in as much as $860 million, or just over 25 percent of the current revenue dip the state has experienced with one legislative move.
But where are Pennsylvania voters on this? It turns out that attitudes may have shifted a lot in recent years. I say "may" because the data I'm about to cite comes from a statewide survey by the Pennsylvania Cannabis Coalition, which obviously has an interest in making the case for legalization. The poll was conducted by Harper Polling, which according to FiveThirtyEight.com has a B/C rating and a record of calling races correctly 91% of the time.
Here's what the poll, which came out in May when no one was paying any attention to this, said:
Nearly two-thirds of Pennsylvanians support legalizing marijuana for adults and establishing a statewide system to regulate and tax sales—including majorities of the state’s conservative, moderate and liberal voters. [...] Results from the survey suggest that Republican lawmakers would likely see a net gain in political support if they chose to support legalization. A third of Republicans (34 percent) said they would enthusiastically support a Republican legislator who voted for legalization. That proportion is even higher (45 percent) among Republicans age 18 to 39. The political risk to Republican officials, the survey found, would be minimal: “A mere 9% of Republicans would vote their legislator out of office due to a vote in support of adult-use cannabis,” the memo says. Overall, 54 percent of self-identified conservatives said they supported legalization, compared to 63 percent of moderates and 76 percent of liberals. Supporting legalization may even be a way for conservative candidates to poach liberal voters, the survey suggested. “Nearly a third of Democrats would be more likely to vote for a Republican legislator who they knew ‘supported controlling, regulating, and taxing the sale of adult-use cannabis in Pennsylvania’ (31%),” the polling memo by Harper Polling, which has traditionally worked for Republican candidates and conservative causes, says. “Male Democrats would be especially willing to consider voting for a Republican legislator who supports adult-use cannabis (45% yes), as would younger Democrats (46% yes).” The poll suggests that one reason for the broad support for legalization is financial: “Voters across all key demographics,” the survey found, “would rather see the state regulate and tax adult-use cannabis as opposed to raising income, sales and business taxes.” Pennsylvania is projected to face a budget gap of up to $5 billion later this year, making it more difficult for the state to support workers and rebuild its economy following the coronavirus outbreak. [...] The poll of 644 likely voters was conducted April 21 – 26 and has a margin of error of +/-3.86%.
Another thing that might cause Republicans to look more favorably on legalization: Probably the loudest, national foe of it right now is former Rep. Patrick Kennedy. Yes, that Patrick Kennedy, son of liberal "lion," former Sen. Ted Kennedy and a scion of the ultra-progressive family who a) does not live in Pennsylvania (he lives in New Jersey) and b) has very publicly battled with addiction problems.
On the one hand, Kennedy may feel this gives him standing to argue against legalization of any currently-banned substance. On the other, his critics argue his anti-marijuana advocacy is an exercise in reputation-rehab prompted by numerous revelations and extensive press coverage of his own addictions to obviously dangerous drugs like cocaine and OxyContin. Note also that Kennedy's cousin, Rep. Joseph P. Kennedy III, is currently challenging Sen. Ed Markey in a primary in Massachusetts that Sen. Elizabeth Warren just waded into, big time, to try to shut the younger Kennedy out.
Either way, though, Patrick Kennedy shouldn't by rights prove particularly persuasive to Pennsylvania Republicans on balance, given where Norquist, the public-at-large and the math sit, and given longstanding animus towards the Kennedys and their brand of progressivism among the GOP base.
As Pennsylvania legislators move to consider the issue further, no doubt we'll see more polling and back-and-forth on this. But the bottom line is, it looks like legalization would help avoid other tax hikes by quite a bit and do it in a way that does not, in itself, constitute a violation of the Taxpayer Protection Pledge. That should matter a lot to Pennsylvania Republicans with taxpayers already hurting and the economy still looking shaky.