Sen. Thompson – Budget Breakdown

Mike Seals - September 25, 2020 11:15 am

By Sen. Roger Thompson, Senate Appropriations Chair


When the legislature writes the budget, the funds we appropriate come from many different revenue streams, like income taxes, oil and gas taxes, cigarette taxes and others as well—about 20 in all.  I think people are aware that oil and gas collections are still low, and when that industry is down, it impacts many other areas in our economy. Add that to the economic impact of the pandemic, and it should be clear to see the challenges our state is facing.

I think people understand that, but one question I get a lot as I travel around my own district is what happened to all the money from medical marijuana? I was on a conference call with fiscal leaders from across the United States and the point was made that people always seem to think there is more revenue from the marijuana industry than we actually collect.  Another complication we face is that we have no data that we can draw on to make reliable projections for revenue collections from medical marijuana.  In Oklahoma, we’ve only had legal medical marijuana since 2018, when voters approved State Question 788.  We have years of data on income tax, car sales, and alcohol taxes.  So far, we’ve only had one full fiscal year of tax collections for medical marijuana we can examine.

So how much money are we talking about and where does it go?  When you look at the excise tax and sales tax, it produced about $69.6 million last year, our first full fiscal year of collections.  Operational costs for the Oklahoma Medical Marijuana Authority (OMMA) must be paid first.  Their annual budget is $16.9 million.  Additionally, we were able to use $30 million for the 1017 Fund for our public schools.  Revenue collections from medical marijuana also means, ultimately, there are funds available for alcohol and drug treatment.

We know comparing this point in time during the current fiscal year to last year, we’ve seen a significant increase in collections from medical marijuana, about 119%. This year so far, we’ve collected $14.8 million compared to $6.8 this same time last year.  Although we don’t know the exact reason, many observers point to the pandemic.  But even with those figures, when you consider the budget downturn last year left us with a $1.3 billion hole, you can see the revenues from medical marijuana can’t even begin to make up for other losses in revenue—and we are still trying to determine the continued economic impact of the pandemic and low energy prices on the next fiscal year’s budget.

So, in answer to the question what happened to all the medical marijuana money, I can tell you it is going where it was intended—the administration of the OMMA, education, and drug and alcohol rehabilitation.  It is providing much-needed revenue for the state—just not the hundreds of millions of dollars many people imagine.

If you have any questions about the budget or the appropriations process, I invite you to contact me at 405-521-5588 or email [email protected]. Thank you.


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