Pot may provide tax relief for new school in Easthampton

Published: 5/18/2018 11:17:54 PM

EASTHAMPTON — Proponents of recreational marijuana have long touted the tax benefits of legalization. Now Easthampton may use those benefits to address rising property taxes.

Introduced by Councilor Owen Zaret, a resolution referred to the City Council’s Rules and Government Relations Committee Wednesday asks the city to set aside a significant amount of the revenue it receives from recreational marijuana for tax relief.

The resolution cites the proposed debt exclusion for a new school building in Easthampton. Although it says the new middle and elementary school building is a necessity, it also notes the increased tax burden that building the school would put on residents, particularly the elderly.

As such, it proposes that the city form the Easthampton Community and Need Based Assistance Act, which would use recreational marijuana revenue to help with this issue.

Divided into two parts, the proposed law would be composed of a Cannabis Relief Act for Taxes and Cannabis Community Assistance.

CRAFT would put 50 percent of the city’s cannabis revenue from taxes and host agreements into a fund in which residents 65 and over could enroll for property tax relief.

The CCA would take 20 percent of the cannabis revenue and distribute it evenly to the Community Center and Senior Center, although Zarat said outside of the meeting that other community organizations might benefit as well.

“We want to make sure that there are no financial hardships suffered by individuals in our community,” Zarat said at the council meeting.

He noted the marijuana revenue set to come into the city, saying that the best way to have the money contribute to the schools was for it to contribute to tax relief. He also said that he wasn’t attached to any particular concept.

Asked if she’d looked over the framework, Mayor Nicole LaChapelle said that she welcomed any conversation around revenues coming into the city.

“The conversation has to start proactively,” said LaChapelle.

She also said that she would entertain the resolution’s general framework.

Councilor Daniel Rist noted that the council was not allowed to tell the mayor how to appropriate money through ordinance, although it could do it in a resolution requesting that an appropriation be considered. Rist also said that the council has time to debate cannabis revenue, because the time it will take for it to develop. Sales can begin this summer.

The resolution was moved to the committee by a unanimous voice vote. Councilor Margaret Coniff was not present at the meeting.

After the meeting, Zarat noted the tax increase that would come from the school project if approved, and he said that he’d heard from a number of people who said that they would like to support the school project, but that it would not work for them financially because of the tax increase.

“We need to legislate with the entirety of the city in mind,” he said.

The school vote will take place on Tuesday. The projected cost of the project is $109.3 million, with $59.71 million financed through local property taxes.

According to city officials, the tax impact of the project to property owners would range from $2.98 to $3.84 per $1,000 of assessed property value.

For the average home in Easthampton home valued at $228,400, that would represent an annual tax increase of $680 to $877. Easthampton’s tax rate for the current fiscal year is $16 per $1,000 of assessed value.

Zarat said that by the time the bulk of the tax increase would be seen, the relief from the marijuana revenue distribution framework he is proposing would be available.

Also this week, the council raised a tax rebate program for low-income senior homeowners from $700 to $1,000 per year, and lowered the age threshold from 65 to 70.

Bera Dunau can be reached at bdunau@gazettenet.com.

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