Pot legalization would show big savings for California

By Ben Barnes

If Prop19 is passed in California on November 2nd, the legalization of cannabis would help relieve some of the state's financial woes.  However, the bulk of the savings wouldn't be from tax revenue; rather from the money saved by law enforcement cuts, experts say.

It's been debated that taxing marijuana would could rescue the state from it's budget issues.  But the reality is, despite what many people think, the law change would not act as a financial cure-all, say top legalization advocates.

According to the Cato Institute in Washington D.C. most of the money added to California's revenue would be from budget cuts, or, job cuts.  The institution estimates that approximately $1.312 billion would be saved from the legalization of pot.  It's said that around $352 million would be from tax revenue, while the remaining $960 million would be from saved from law enforcement costs.

Jeffrey Miron, a senior fellow at the Cato Institution, said that most of the savings would be due to law enforcement cuts, including police officers, prison guards, judges, and prosecutors whose service would no longer be required.  These personnel cuts would damage the job market as well, at least initially, he said.

"I think that California is being somewhat optimistic in thinking that this is going to make a significant difference to its budget situation.  I think it won't do much for the economy," said Miron.

 If passed, Prop19 would not legalize cannabis statewide.  This means that local governments would have the power to either allow or prohibit the sale of marijuana, as well as to impose additional taxes and/or fees, on top of sales tax.

Some have a more optimistic outlook on the savings from tax revenue, such as National Organization for the Reform of Marijuana Laws, or NORML, director Dale Gieringer.  Although, it will be a long time before California sees any of those funds, he says.