SPRINGFIELD, Ill. (WAND) - A billion-dollar industry that is boosting state revenue is causing a budget bind for Springfield city leaders. Because of state law, officials can't budget, or spend any of the 3% sales tax collected from marijuana sales since July of 2020.
"If we were to budget and report on those funds specifically, we would be violating the state confidentially laws for business taxes," the city's budget director, Bill McCarty, said.
McCarty said since Springfield only has one company owning its two marijuana dispensaries, budgeting the money brough in from sales tax would reveal the revenue of the company, violating state law.
"Unless we can get a law changed or permission from our dispensaries, we have to set on that money unless it is used for general purposes," McCarty said.
City council did not allocate the money for general purposes though. Instead, 50% will go towards police and fire pensions and the other 50% to economic development. McCarty said unless the city has five dispensaries, he can't use the funds, at least not yet.
"We have to get the law changed," he said, but said he does not expect it to be quick, so for now he's sitting on the money and it has not been included in the 2022 budget set to start in March.
"We're getting this money, but we can't report it and we can't spend it for its intended purpose yet," McCarty said.
McCarty said until state law is changed, or until the company who owns the dispensaries agree to allowing the tax revenue amount to be released, McCarty said it cannot be done. He can't even tell the city council.
"I can tell you it is more than $0," he said.
McCarty said if state law is changed or an agreement on the release of tax sales by the company is made, the city will amend the budget to include the income and allow for it to be spent.
In the first year of recreational marijuana sales, more than $1 billion in legal weed was sold in 2020. That is for both recreational and medical. In all of 2020, more than 14 million adult-use marijuana products were sold statewide.
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