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Council hears proposal to keep marijuana tax receipts in separate fund; $8M estimate built into budget
Summary
Legislative Research Director presented draft ordinance to create a cannabis-host special revenue fund; auditor included a conservative $8 million 2025 revenue estimate, but staff warned receipts and distributions depend on state timing and appropriations.
City legislative staff explained a proposed ordinance to collect adult-use cannabis excise-tax receipts into a dedicated special revenue fund, a measure council members said would improve transparency and allow deliberation about intended uses.
Matt Erickson, director of the Legislative Research Office, described draft ordinance 34326, which would establish a Cannabis Host Community Special Revenue Fund for remitting adult-use cannabis tax receipts rather than treating them as general revenue. He summarized state law (Ohio Revised Code chapter 3780) and Issue 2, noting a 10% statewide excise tax and a statutory provision that 36% of the excise tax revenue be remitted to host municipalities in proportion to local sales.
Erickson and auditor Megan Kilgore emphasized uncertainty about how much Columbus will receive; Kilgore included a conservative $8 million estimate in the auditor's 2025 revenue forecast. Erickson said other analyses show a wide statewide range in year one and that actual city receipts depend on local retailer productivity and the state's transfer timing.
"Ordinance is written as 30 day," Erickson said, explaining that if council adopted the ordinance on Dec. 16 it would become effective around mid-January. He added that cities likely will not receive distributions until state appropriations are included in the General Assembly's upcoming biennial budget, with first remittances expected after those appropriations are enacted.
Council members asked whether establishing the special fund would change the administration's proposed 2025 budget. Erickson said it would be an accounting change: the auditor's $8 million estimate was included in the administration's general fund figures; moving receipts into a special revenue fund would require a corresponding amendment to the general fund budget and increases in the affected other-funds ordinances so there would be no net change in all-funds totals.
Council members discussed the lack of statutory restrictions on local use under current ORC language and indicated a desire to develop local policies or restrictions (for example, equity-focused spending) in follow-up conversations with the administration and community stakeholders.
Next steps: council intends more detailed deliberations about how to allocate any future marijuana tax receipts and whether the special revenue fund should include spending restrictions.
