Trinity County voters will decide on Nov. 3 whether or not to approve two separate countywide tax measures that would provide additional revenue to county coffers. Measure G, a commercial cannabis tax, is a general tax requiring a majority vote for passage. The other, Measure K, is a half-cent sales tax increase to specifically fund county law enforcement activities which makes it a special tax, subject to approval by a two-thirds majority.
Though Trinity County charges application fees to process and award commercial cannabis licenses to legally operate, it does not currently collect taxes on commercial cannabis activities, and approval of Measure G, developed and promoted by a local growers’ alliance, would change that.
As crafted by the Trinity County Agricultural Alliance and qualified for the ballot by obtaining sufficient voter signatures, the proposed tax on a commercial grow would be a flat rate tax per pound of cannabis that will vary based on the type and weight harvested.
The full rate values are as follows: $15.44 per pound for cannabis flowers; $4.59 per pound for leaves and $2.16 per pound for fresh cannabis plants.
The first 100 pounds of each category would be taxed at no more than 25 percent of the full rate. More than 100 pounds through 400 pounds of each category would be taxed at no more than half the full rate. More than 400 pounds through 1,000 pounds of each category would be taxed at no more than 75 percent of the full rate. More than 1,000 pounds of each category would be taxed at no more than the full rate.
In addition, Measure G would impose a 2.5 percent of gross sales tax for each cannabis retail license held by a person within the county. The 2.5 percent would be on top of the 7.25 percent state sales tax.
The proposed measure would allow the Trinity County Board of Supervisors to lower the tax by a majority board vote, but the tax could not be increased without voter approval.
Revenue from the tax would go to the county’s general fund. It will be calculated and reported using the METRC track and trace system used by California and several other states to track all cannabis activities and calculate state cultivation taxes.
An impartial analysis provided by Trinity County County Counsel Margaret Long says the measure would not authorize unlawful conduct and would exempt non-commercial adult use, medical use and caregiver use. The measure would establish penalties for failure to remit taxes when due and includes an appeals process.
A ballot argument in favor of Measure G signed by TCAA President Adrien Keys says the product-based, flat-rate and tiered tax is intended to encourage small, less impactful farms and higher quality production. He notes the proposed rate is competitive with Trinity County’s neighbors’ rates and “will not overly burden consumers who choose to participate in regulated cannabis consumption.”
It adds that the cannabis industry has remained consistent through this year’s economic and health crisis and the market continues to grow, claiming that by drawing revenue from out-of-county sales, “our county’s tax base is expanded and diversified.
Supporters of Measure G come from all walks of life, including cannabis program participants, business owners and community leaders. Taxing cannabis in the same manner as other businesses, on products actually sold, is an important concept to businesses in the county.”
There is no organized opposition to Measure G, but others who attempted to qualify a competing measure for the ballot through the petition process have questioned whether it will cost the county more to collect the promised tax revenue than it receives, and how it will discourage illegal cannabis activities from occurring.
Measure K to impose an additional half-cent sales tax for law enforcement in Trinity County was placed on the November ballot by a vote of the Trinity County Board of Supervisors. Unlike Measure G that would benefit the county’s general fund, Measure K is a special tax reserved solely for law enforcement activities and thus requires a two-thirds majority vote for passage.
The measure would increase the current sales and use tax in Trinity County from 7.25 percent to 7.75 percent, effective Jan. 1, 2021. Of the total tax, the state keeps 6 percent, leaving 1 percent for the county’s general fund and 0.25 percent to the local transportation fund.
If the half-cent increase is approved, the additional revenue would be distributed between the Sheriff’s Office for patrol and jail operations (67 percent), District Attorney’s office (17 percent) and the county Probation Department (16 percent).
Based on prior years of sales and use tax received, the measure could bring approximately $560,000 in additional revenue shared between the Sheriff, District Attorney and Probation.
There is no organized opposition or promotion of the proposed tax increase, however, it was widely touted during the county’s recent budget adoption process as one of very few available means to increase county revenue that’s been stagnant for several years as costs continue to rise.
County Administrative Officer Richard Kuhns said that despite efforts by all departments to trim costs and hold the line, expenses continue to exceed revenues. In this fiscal year, requests for discretionary funds came in $4.6 million above projected revenues and that did not include the additional $2.5 million the general fund needs to contribute to complete construction of the new county jail.
Several department heads, including those from all of the law enforcement offices, also spoke of their need to reduce staff and cut services next year if no new revenue becomes available.