A Marijuana Tax for the Arts? Maybe.
The arts sector in Cuyahoga County has long sought a way to stabilize the revenue stream for its public support, which since 2006 has been a 30-cent per pack tax on cigarettes. Among many other possibilities discussed by policy makers or suggested (taxing real estate, hotel stays, dine-in restaurant meals, beer and wine, soft drinks) the prospect of a tax on marijuana occasionally came up. But until recently, marijuana in Ohio was legally available only as a medicine, which, as Fred Bidwell noted last year, is not taxable. That changed on Election Day 2023, when 57+ percent of Ohio voters said they approved of legalizing recreational use. The law went into effect December 7. Immediately after the election took place, Ohio Legislators began discussions about how to modify it.
Enter State Senator Kent Smith, who represents Ohio District 21, which includes Euclid Cleveland Heights, and other east side communities. A lot of people in Cleveland’s arts sector know Smith from a longtime connection to the music scene, from his byline long ago in the Cleveland Free Times, as announcer for the Burning River Roller Girls, and as collaborator with Derek Hess on his book Please, God, Save Us From Your Followers.
CAN was speaking with Ohio Senate Minority Leader Nickie Antonio Friday to begin learning about the possibility of recently legalized marijuana as a supplement to the tobacco tax, and we were surprised to learn that a version of a new bill revising the legalization statute passed the senate December 6, including a provision that would allow Ohio counties to do exactly that.
Antonio credited Smith for recognizing that the legislature’s negotiations to modify the law created an opportunity.
The language that passed the senate says that, with voter approval, counties could levy up to a three percent excise tax on the retail sale of adult use marijuana to support artistic, cultural, and entertainment opportunities (R.C. 5739.272). The proposed language specifies that the levy could have any life span the county’s voters approved, up to a maximum of 10 years. It would require a simple majority vote in favor. It would give the possibility of a marijuana tax in support of the arts to any of Ohio’s 88 counties.
“I think it is easy to argue for giving counties the ability to have an excise tax for the arts, because voter support for the existing tax has been so strong, and because major art stakeholders have such strong bipartisan support. […] The positive vote on Issue 2 opened the door to genuine bipartisanship, and so I wanted to take a shot to expand funding for community stakeholders and the art sector. Luckily The GOP was willing to dance,” Smith said.
He credits his colleague Republican Jamie Callender as evidence of bipartisan support for the idea. Smith and Callender introduced Ohio’s Save Our Stages Act in support of the performing arts community during the COVID pandemic.
The two were together during a panel discussion in celebration of the life and music of John Prine at the Rock and Roll Hall of Fame Thursday.
For the permission to go into effect, it has to survive another round of negotiations in the House, and then be signed by Governor Mike Dewine.
“I think it has a chance with Jamie’s leadership in the house,” Smith said, “and frankly [Speaker of the House] Jason Stevens. I think a version of what I proposed is going to survive.”
Because legal, taxable recreational use of marijuana is new, there is little information about how large the industry might be, and therefore how much tax it could generate. Smith says predictions he has heard range from $100 to $200 million in tax revenue from the state-wide tax. If a county marijuana tax of 3 percent were to pass, it would be in addition.
The House could take up discussion as early as this week.