Legal pot could take Illinois higher
Recreational marijuana could rake in $525 million in taxes, with corresponding job gains and cuts in enforcement costs
Colorado tourists visit a marijuana greenhouse. A new study finds legalized pot could increase Illinois tourism. (Wikimedia Commons/My 420 Tour)
By Ted Cox
Legal marijuana could become a billion-dollar business in Illinois and create up to 24,000 jobs, according to a new study released Friday.
The Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign released a study on “The Financial Impact of Legalizing Marijuana in Illinois.”
“If marijuana were legalized, regulated, and taxed in Illinois, an estimated $1.6 billion would be sold in the state, in part due to regional tourism,” the study states. “At a 26.25 percent state excise tax on retail marijuana in addition to the 6.25 percent general sales tax, Illinois would … generate $525 million in new tax revenues,” while creating 23,600 jobs at more than 2,600 businesses. The study projects that it would boost the Illinois economy by $1 billion a year and allow the state to extend additional funding to education, pension payments, and drug treatment and prevention programs.
Legalization, the study suggests, would also produce $18.4 million in reductions in funding for criminal justice, as the state would no longer need to prosecute and incarcerate pot criminals.
“The benefits of legalization outweigh the social costs,” the study says. “While some legislators and constituents are concerned that legalizing recreational marijuana would increase consumption of other illicit drugs, increase motor vehicle crashes, and reduce workplace productivity, there is no evidence to support these claims. In fact, legalized cannabis has been found to reduce opioid use by as much as 33 percent, reduce traffic fatalities by as much as 11 percent, and have no effect on occupational accidents or rates of employee absenteeism. This is because marijuana consumption has not been found to increase after legalization.
“Legalizing, regulating, and taxing recreational marijuana would reduce costs to taxpayers, spur economic activity, create jobs, and shrink the black market,” the study adds. “While new tax revenues would be modest and would not solve Illinois’s fiscal issues, they would improve the state’s budget situation and credit-rating outlook, fund investments in critical infrastructure and public education, and reduce criminal-justice costs.
“Illinois should legalize, regulate, and tax recreational marijuana,” it states in no uncertain terms.
“Assuming similar usage and taxation rates as Colorado, we’d expect marijuana legalization to have more than twice the financial impact in Illinois because of our state’s comparatively larger size,” said study co-author and ILEPI Policy Director Frank Manzo IV. “At a practical level, this means tens of thousands of new jobs and hundreds of millions of dollars in new tax revenues that can be invested in vital infrastructure, education, and public-safety programs that have been most impacted by recent budget pressures in Springfield.”
“Assuming similar usage and taxation rates as Colorado, we’d expect marijuana legalization to have more than twice the financial impact in Illinois because of our state’s comparatively larger size.”
The study notes that, in other states that have already legalized recreational cannabis, usage rates failed to rise, opioid use dropped by as much as 33 percent, traffic fatalities shrank by as much as 11 percent, and there was no effect on occupational accidents or rates of employee absenteeism.
“The claims of legalization opponents have been studied exhaustively in states that have begun to tax and regulate legal marijuana,” said study co-author and University of Illinois Professor Robert Bruno. “While these policies have consistently brought a myriad of benefits to taxpayers and the economy, the research has failed to find any correlation between legalization and increased usage or other social costs.”
Indeed, the study projects gains in enforcement costs with legalization. “Though decriminalization has already dramatically reduced law enforcement costs, police and courts still spend millions of dollars each year prosecuting marijuana offenses and hundreds of people remain incarcerated at a cost of more than $22,000 each year per inmate,” said study co-author Jill Manzo. “By ending these prohibitions, Illinois taxpayers could save $18.4 million per year.”
Gov.-elect J.B. Pritzker suggested in one debate against incumbent Gov. Bruce Rauner that the state could take in $700 million in revenue with legalization, and he has also proposed legalizing sports betting.
The study did suggest that some urgency was called for, as “after voters approved measures in Michigan, Missouri, and Utah this week, a total of 33 U.S. states and the District of Columbia have now legalized marijuana either for medicinal or recreational purposes.”
It cited a poll of Illinois residents conducted earlier this year by the Paul Simon Public Policy Institute at Southern Illinois University showing that two-thirds favored legalization.