Union City voters will be asked to decide this November whether the city should impose a cannabis business tax.
The measure was approved for the Nov. 6 general election ballot by the City Council Tuesday, and is intended to bring over a million dollars into the cash-strapped city’s coffers.
The vote for placing the cannabis business tax measure on the ballot was 4-1, with Councilman Gary Singh dissenting. Singh has voted against any actions that allow and permit marijuana businesses to operate in the city.
If approved, the cannabis tax measure could raise around $1.4 million annually for the city in unrestricted general fund money. Tax rates levied against marijuana business could vary widely, with the council having final authority to raise or lower them.
Those who cultivate the drug would be required to pay between two and eight dollars per square foot of growing space based on the type of lighting used and type of growing operation. Rates would increase beginning in 2021.
Those selling, testing, distributing, or manufacturing marijuana would have to pay between one and six percent of their gross receipts to the city.
No marijuana businesses operate in the city yet, but the city council earlier this year signaled it would permit two different operations. The city only sanctioned marijuana businesses within its borders late last year, after having banned them in 2005.
The city’s most recent budget included some spending reductions in the previous and current fiscal year. The city is anticipating an average annual deficit of $4.3 million through fiscal year 2021-22, according to city reports.
Mayor Carol Dutra-Vernaci said there are limited solutions for the city currently, comparing city efforts to balance the budget to “trying to right a sinking ship.”
The measure would require a simple majority of voters approval to go into effect, city reports said. A consultant hired by the city to survey residents found about 63 percent said they would definitely or probably vote yes for the cannabis business tax measure.
While city staff reports say the money from the measure would be aimed at maintaining or improving “essential services” such as police and fire, youth violence and gang prevention programs, senior services and the maintenance of city parks, the revenue would go into the general fund as unrestricted money.
Out of hundreds who took an online city survey online asking about local revenue-generating measures, dozens said they wouldn’t support them, according to anonymous responses in a city report.
One respondent said they would want to see specific plans for the money generated, and would want to “understand all the possibilities of how the money could be spent.”
Many others said the city should manage its current resources better, like any other household must.
“If we don’t have the money to cover our bills we must sacrifice something,” one response read. “I wish our city would do the same.”
