Ohio GOP Leadership Plan To Revise Cannabis Revenue Allocation Is Threat To Economic Gains, Says Analyst

Rob Moore, an analyst at Scioto Analysis, looked at the outcome of altering how Ohio had planned to use the hundreds of millions in revenue expected to be raised by excise taxes on the state's new legal market.  

Gov. Mike DeWine and state Senate President Matt Huffman are seeking changes in various aspects of Ohio’s voter-approved legalization initiative, but their main focus is on rerouting funds from social equity programs to law enforcement.

In an Op-Ed for the Ohio Capital Journal, Moore said legalization in Ohio won’t be costless nor free of problems. “But the largest impact we expect is productivity. Based on what we have seen in other states that have legalized recreational marijuana, we expect the costs of recreational marijuana to rise to the level of $760 million worth of lost productivity,” said Moore.

“These costs, though, will be offset by the benefits of programs funded by excise taxes levied on the industry. In particular, if the Cannabis Social Equity and Jobs Fund and Substance Abuse Addiction Fund authorized by Issue 2 are spent on evidence-based programs, we estimate its benefits to be about $800 million in job training and substance abuse treatment benefits,” he said.

Changing Usage Of Funds: Impact On Economic Efficiency Of Program

A big problem with reallocating these funds toward policing is that it is an understudied public policy area, Moore pointed out. “Very little work has been done to evaluate the economic impacts of policing interventions and less has been done on impacting the economic benefits and costs of investing in jails and prisons as some assembly leaders have suggested.”

He cited studies indicating that for every dollar spent, job training programs yield $6 in benefits, while substance abuse programs offer $9 in benefits.

Additionally, data from the Washington State Institute for Public Policy showed that every dollar spent on police deployment can reduce property crime, resulting in $5 worth of benefits.

“While this is one way to tackle crime, another is to fund general job training programs, which reduces the value of crime relative to regular employment activity,” Moore said.

“Training is a different story. The evidence for the economic benefits of new police training is not strong right now. This leads me to conclude that reallocating money currently allocated toward job training and substance abuse treatment toward police and jail construction will likely reduce the economic efficiency of marijuana legalization,” Moore said. 

“Let us hope that if we are going to reallocate funds going toward effective programs that we will at least put resources toward evaluating these new programs they fund.” 

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