Murphy budget: Legalize marijuana by Jan. 1, tax sales at 25%

TRENTON — Gov. Phil Murphy campaigned for the job last year promising to legalize marijuana in his first hundred days in office. Legalization is still his policy goal. But with six weeks left until his initial deadline, the timeline has shifted.

Murphy’s proposed budget for the 2019 fiscal year that starts in July counts on $80 million in additional marijuana-related taxes, largely through legalizing it for use by adults by Jan. 1, 2019.

“Legalization will allow us to reinvest directly in our communities – especially the urban neighborhoods hardest hit by the misguided war on drugs – in their economic development, in health care and housing, child care and after-school programs, and other critical areas,” Murphy said in his budget speech Tuesday. “These investments will pay dividends far greater than the cost of mass incarceration.

Acting state Treasurer Elizabeth Maher Muoio said the 2019 budget anticipates $60 million in revenue from taxing legal marijuana sales.

Over five years, that number could reach $300 million annually, senior administration officials said. A 2016 report from New Jersey Policy Perspective projected $305 million in marijuana taxes, with around 343,000 people spending $1.2 billion a year on marijuana priced at $350 an ounce.

Senior administration officials say the revenue projections anticipate that marijuana sales would be covered by a 25 percent excise tax, plus the 7 percent sales tax. That’s a higher initial tax than what Sen. Nicholas Scutari, D-Union, the idea’s leading legislative proponent, has proposed – 7 percent to start, ramping up to 25 percent over five years.

The idea has been slow to get traction in the Legislature.

Assembly Majority Leader Louis Greenwald, D-Camden, said he neither supports nor opposes marijuana legalization but doesn’t object to Murphy including the tax revenue in the budget plan.

“I am someone, and a lot of my colleagues I think are in the same position, where we are solidly on the fence. We have real issues. What is the impact on children? What is the impact on the brain? How do you do this in a safe way?” Greenwald said.

Greenwald said he’s where it sounds like Murphy used to be on the issue and wants to find out more about how the governor came to support it.

Other lawmakers are opposed, some of whom are suggesting as an alternative that the state decriminalize the possession of small amounts of the drug.

Among them is Sen. Robert Singer, R-Ocean, who said it’s wrong for Murphy to count on $80 million in marijuana taxes for the budget.

“For them to anticipate money is really not fair. Not honest,” Singer said.

Singer said it’s frightening that Murphy’s budget plan also counts on increased revenue from medical marijuana. Muoio said the budget projects $20 million in revenue from expanding New Jersey’s medical marijuana program.

“You know how they increased it in California? If you had a headache, you can get it,” Singer said. “So people that need it should get it, but let’s not increase it just to bring additional revenues in.”

A state medical panel has suggested that New Jersey expand the list of conditions that makes a patient eligible for medical marijuana to include chronic pain, migraines, anxiety and Tourette’s Syndrome.

Additionally, the state Department of Health and State Board of Medical Examiners are due to submit a report to Murphy in about a week recommending improvements to the medical program that would lead to improvements for patients, doctors and dispensaries.

Murphy said he greatly respects lawmakers who propose decriminalizing the possession of small amounts of marijuana but that legalization, regulation and taxation is “the only sensible option.”

“Decriminalization alone will not put the corner dealer out of business, it will not help us protect our kids, and it will not end the racial disparities that we see,” said Murphy, who said those “must be” the goals of state officials.

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Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at michael.symons@townsquaremedia.com