The Humboldt County Board of Supervisors will have the option Tuesday of halting a regular increase to its tax on commercial cannabis, though upcoming losses from the coronavirus pandemic could affect the supervisors’ decision.
The excise tax on local cannabis is supposed to increase yearly in order to match the rising Consumer Price Index. In March, the supervisors asked county staff to come up with a way to halt this year’s increase, since the high costs of legal cannabis have deterred many local growers from becoming compliant.
But the supervisors’ direction to staff came before the coronavirus pandemic began severely impacting the global economy. Approving a stay on the tax increase could net the county hundreds of thousands of dollars in revenue losses, according to a county staff report.
“As costs such as salaries and benefits, consumables and contract services increase in response to economic fluctuations, revenue growth is imperative to ensure service levels continue addressing the needs of Humboldt County citizens,” the staff report reads. “Without revenue growth, current service levels may not be maintained over the long-term.”
Currently, the county’s pot tax involves charges of $1 per square foot of outdoor cultivation area, $2 per square foot of mixed-light cultivation area or $3 per square foot of indoor cultivation area.
Each of the costs is set to increase by a number of cents as average prices rise each year. Drawn out across the number of legal growers, a halt on that increase would create losses of more than $780,000 annually.
The coronavirus pandemic has widely impacted the economy across a range of entities, including government budgets.
“I think COVID definitely changes a lot in the government budgetary process,” said Terra Carver, the executive director of the Humboldt County Growers Alliance. “We have an opportunity to provide a positive role in trying to support our local government as it relates to the budget.”
The growers alliance hasn’t taken an official position on the board of supervisors’ agenda item. The supervisors will meet on Tuesday to discuss the potential tax stays.
The excise tax on local cannabis is supposed to increase yearly in order to match the rising Consumer Price Index. In March, the supervisors asked county staff to come up with a way to halt this year’s increase, since the high costs of legal cannabis have deterred many local growers from becoming compliant.
But the supervisors’ direction to staff came before the coronavirus pandemic began severely impacting the global economy. Approving a stay on the tax increase could net the county hundreds of thousands of dollars in revenue losses, according to a county staff report.
“As costs such as salaries and benefits, consumables and contract services increase in response to economic fluctuations, revenue growth is imperative to ensure service levels continue addressing the needs of Humboldt County citizens,” the staff report reads. “Without revenue growth, current service levels may not be maintained over the long-term.”
Currently, the county’s pot tax involves charges of $1 per square foot of outdoor cultivation area, $2 per square foot of mixed-light cultivation area or $3 per square foot of indoor cultivation area.
Each of the costs is set to increase by a number of cents as average prices rise each year. Drawn out across the number of legal growers, a halt on that increase would create losses of more than $780,000 annually.
The coronavirus pandemic has widely impacted the economy across a range of entities, including government budgets.
“I think COVID definitely changes a lot in the government budgetary process,” said Terra Carver, the executive director of the Humboldt County Growers Alliance. “We have an opportunity to provide a positive role in trying to support our local government as it relates to the budget.”
The growers alliance hasn’t taken an official position on the board of supervisors’ agenda item. The supervisors will meet on Tuesday to discuss the potential tax stays.
