Retail Pot Revenue Should Fund Melrose Schools, Safety: Alderman

MELROSE, MA — The tax revenue from however many retail marijuana shops Melrose ends up hosting would be earmarked to bolster schools, public safety and drug abuse prevention under an order filed Thursday. Alderman-at-Large Michael Zwirko wants the entirety of the 3 percent excise tax to go into an education, public safety and substance abuse prevention stabilization fund.

The revenue would remain separate from the general fund and residents would be assured the money wouldn't be going to anything else, Zwirko said. The aldermen would be able to appropriate the funds on an annual basis as they see fit, which Zwirko said keeps the money flexible and going where its needed most.

"[Legalization] presents fiscal opportunities and cultural and operational challenges," Zwirko said. "Opportunities for desperately needed new revenue sources and challenges in enforcement as well as the impact on our community. Because of our dire fiscal situation with respect to school funding, I am filing this order to establish an ‘Education, Public Safety & Substance Abuse Prevention Stabilization Fund’ so that we can use these new revenues where it is needed the most: our schools."

School funding is at the center of April's special election. The City is asking residents to approve a Proposition 2 1/2 override to the tune of $5.18 million. School and city officials have said not passing the override will lead to drastic cuts that will reverberate beyond the schools.

Meanwhile, there has been talk at city meetings about how retail marijuana shops would impact the police force. Chief Michael Lyle has been among those saying there haven't been any problems with Garden Remedies, the city's medical marijuana store on the Newbury Turnpike. But if a retail shop ends up closer to the population - or even downtown - there could be an uptick in at least traffic and parking enforcement calls.

"As this new product comes to market, our public safety officials will also feel the impact. They will require training to enhance their enforcement capabilities, learn compliance with the laws and a whole host of other unforeseeable costs," Zwirko said. "Further, Melrose has long been a leader in substance abuse prevention and the advent of this product being available within city limits will drive the need to redouble those efforts so the impact on our children is as small as possible. By segregating these revenues and hard wiring them directly to these three areas, we can work to ensure that the impacts imposed by retail marijuana for adult use are lessened."

It's unknown how much tax revenue a pot shop will yield for Melrose - partially because it's unknown how many there will even be. The Planning Board is recommending the Board of Aldermen cap the number of recreational pot shops at two.

"My purpose with this order is to assuage the concerns of those who are skeptical about this new legal product by highlighting exactly where these funds will be spent," Zwirko said. "While this funding source is not a silver bullet to end our fiscal woes, it certainly will help in three key - and costly - areas."

You can read the full order below.

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WHEREAS, “The Regulation and Taxation of Marijuana Act” (Chapter 334 of the Acts of 2016) and “An Act to Ensure the Safe Access to Marijuana” (Chapter 55 of the Acts of 2017) allows the sale, cultivation, and manufacturing of marijuana by Marijuana Establishments in the Commonwealth; and

WHEREAS, the Division of Local Services of the Massachusetts Department of Revenue released a Local Finance Opinion (LFO-2018-3) and an Informational Guideline Release (IGR No. 17-20) regarding the creation of stabilization funds and in accordance with Chapter 48, Section 5 of The City of Melrose’s Ordinances; and

WHEREAS, the City of Melrose wishes to create the Education, Public Safety & Substance Abuse Prevention Stabilization Fund, appropriated annually by the Board of Aldermen, with the purpose of securing and segregating monies levied from the retail sale of marijuana for adult use to support the City’s public schools and its administration, the enforcement and training of public safety officials, and substance abuse prevention efforts to be effective for the fiscal year 2020 beginning July 1, 2019; and

WHEREAS, the advent of retail sales of marijuana for adult use within the City poses both fiscal opportunities and cultural and operational challenges. Opportunities for new revenues and challenges in enforcement as well as its community impacts. Given the state of the City’s fiscal affairs, specific to education funding, this order seeks to directly supplement appropriations for the Melrose Public Schools and its administration. As this new product will require enhanced enforcement, training, and other costs associated with public safety, this fund seeks to also directly supplement appropriations for Public Safety. Finally, as our community remains committed to substance abuse prevention efforts, the presence of retail marijuana for sale in the City will require an increased focus on prevention, driving up costs; and

WHEREAS, the Education, Public Safety & Substance Abuse Prevention Stabilization Fund will allow one hundred percent (100%) of funds received through the local option excises on retail sales of marijuana for adult use of three percent (3%) imposed by the City on the sale of marijuana and marijuana products to consumers by Marijuana Retailers to be utilized for the stated purpose of supplementing funding to the Melrose Public Schools and its administration, Public Safety (Police, Fire and/or Ambulatory services) and/or Substance Abuse Prevention efforts.

NOW THEREFORE BE IT ORDERED, subject to Massachusetts General Laws chapter 4, Section 4, the City accepts the provisions of Section 5B of Massachusetts General Laws chapter 40 creating an Education, Public Safety & Substance Abuse Prevention Stabilization Fund established for the purpose of directly supplementing annual appropriations thereto.

Photo by Jimmy Bentley, Patch