Voters Urged to Vote No on Measure S, the County Marijuana Tax, by Southern Humboldt Coummunity Alliance
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October 26, 2016
To The Board of Supervisors,
We, the members of Southern Humboldt Community Alliance, do NOT support Measure S.
By placing the Humboldt County Commercial Marijuana Cultivation Measure (Measure S) on the November 8th ballot, the Board of Supervisors are asking the voters to enable the county to do something extraordinary… to levy a property tax in the form of an excise tax on a specific agricultural crop… Cannabis. No other crop in California is singled out in this manner and subjected to its own special tax by a county. The well-known wine growing counties in the state do not tax growers on the square footage of vines planted. This tax potentially sets a reckless precedent of area-based taxation on crops produced for human consumption.
This proposed excise tax, as currently structured, represents yet another economic barrier for Humboldt County’s smallest, and often, most environmentally friendly cultivators. With that said, we respectfully request that the County move immediately to acknowledge and address this situation by developing a tax incentive program that awards the successful implementation of low impact sustainable practices and charitable giving to local community-based organizations.
The real possibility of crop failure needs to be addressed, as well.
While we fully agree that the County of Humboldt needs a robust revenue stream from the county’s dominant industry, we are deeply troubled by the measure the Board of Supervisors has asked us to approve. Remember, Cannabis Cultivation is an Agricultural Enterprise. As such, it’s subject to a number of possible variations in production (weather, disease, varietal planted, water limitations, uninvited pollination, etc.). The yield, therefore, varies based on multiple factors. Instead of having an arbitrary and fixed tax based on an area, Humboldt County needs a tax based on sales or production totals. The current proposal is a fixed-rate fee, based on the type of cultivation and square footage of the cultivated area. The tax is collected up front, regardless of crop success or yield. This is not sustainable.
The square footage cultivation tax disproportionately taxes those farmers who are NOT using high intensity discharge lighting to achieve three or more harvests a year. We believe this tax was created without consideration for factors such as the differences in legal market value between cannabis grown outdoors, versus in a mixed light setting, versus indoors. Due to these variations of growing techniques, the amount of harvests is different as well. Mixed light cultivators, who have two (2) harvests per year, will pay the greatest percentage of gross receipts toward this tax. The outdoor cultivators, who have one (1) harvest per year, will be paying the second greatest percentage of gross receipts. The lowest percentage of gross receipts to be paid will be by mixed light and indoor cultivators who achieve four (4) or more harvests annually.
Arguably, the square footage model of taxation stands to encourage cultivators to achieve more harvests annually, directly increasing the environmental impact of these cultivation sites. There are other difficulties, as well.
The measure lists priority issues to where the funds will be directed. However, due to it being a general measure, all tax revenues raised will go directly into the general fund. Therefore, these funds would be subject to the political process of allocation, with no guarantees that the rural areas of the county paying into this tax will actually receive funds for these much needed improvements to the community infrastructure.
The example of the county bed tax does not bode well. Southern Humboldt does not see a return from revenues generated from accommodation commensurate with proportion of those bed taxes raised in this area.
We understand that the Board of Supervisors cannot act to pass an ordinance amending this tax before the voters pass the ballot measure. However, in a show of good faith to constituents, the Supervisors can place this issue on the agenda for post-election discussion now. Without immediate action showing the Board of Supervisor’s commitment to addressing the inequalities associated with this tax initiative, we strongly urge Humboldt County voters to vote NO on Measure S, the Humboldt County Commercial Marijuana Cultivation tax measure on the ballot November 8th.
Sunshine Johnston, Chair