Beggar Thy Neighbor’s Tax Dollars? – Wisconsin Residents Gave the State of Illinois $36 Million in Cannabis Tax Revenue

March 22, 2023 ·

According to a recent state estimate, Illinois has collected a whopping $36 million in tax revenue from Wisconsin residents crossing the border to purchase marijuana in Illinois, where cannabis use has been legalized. This astounding number highlights the tremendous effect legalization could have on the state economy and attitudes toward marijuana use.

It’s important to remember that Wisconsin is one of the few states where lawmakers have not approved the use of marijuana in any way. Contrarily, 37 states currently have medical cannabis programs. Some, including Illinois, Michigan, and Minnesota, have even gone so far as to legalize cannabis for recreational use.

Efforts Towards Cannabis Legalization

Governor Tony Evers of Wisconsin, a Democrat, has pushed for marijuana legalization in the state, but his attempts have been met with resistance from the Republican-controlled Legislature. Despite several attempts, Governor Evers’ efforts have been repeatedly rejected.

There were hints that GOP leaders were becoming more receptive to medical marijuana at the start of the most recent legislative session in January. However, there have been no significant developments due to this sudden attention.  For years, Republicans had been against such a scheme. 

Senator Melissa Agard, the Senate Minority Leader from Madison, has also been advocating for marijuana legalization in Wisconsin. However, her endeavors have not yet yielded any success. The legalization debate in Wisconsin remains highly polarized, with some legislators like Agard pushing for progressive drug policies while others resist change despite compelling economic arguments.

Latest Revenue estimates From Legislative Fiscal Bureau.

This week, Senator Melissa Agard released revenue estimates from the nonpartisan Legislative Fiscal Bureau, which shed light on the potential economic benefits of legalization. According to these estimates, residents from counties bordering Wisconsin are expected to pay a whopping $36.1 million in Illinois taxes on marijuana purchases.

According to a recent analysis, Wisconsin residents contribute significant tax revenue from marijuana sales in neighboring Illinois. The analysis assumes that out-of-state sales in counties bordering Wisconsin were made to Wisconsinites, emphasizing the potential loss of tax revenue for Wisconsin.

Senator Melissa Agard is encouraging lawmakers to move on to legalizing marijuana in light of this revelation. She suggested that Wisconsin is missing out on significant tax income that could be allocated to government programs like public safety, transportation, and education. Senator Agard advocated for reform and charged that Republicans were impeding progress on this matter.

Senator Agard asserts that the opposition to legalization stems from outdated views and not the interests of Wisconsinites. Legalizing cannabis could aid the state by producing substantial tax revenue and lessening the adverse effects of the war on drugs on local communities.

The analysis showed that Illinois made around $462 million in tax revenue from marijuana sales in 2022, with approximately 8% coming from sales to out-of-state residents in counties bordering Wisconsin. This estimation was based on data from the Illinois Department of Financial and Professional Regulation and assumes that all sales to out-of-state customers in Wisconsin-adjacent counties were made to Wisconsin residents.

Although the LFB analysts warn that the estimate may not be completely accurate. Two dispensaries located in Jo Daviess County, which borders Wisconsin and Iowa, could result in some sales going to Iowa residents instead of Wisconsin.

A Push for Medical Cannabis Legalization.

In January, Assembly Speaker Robin Vos indicated that discussions had only begun regarding a medical marijuana proposal that legislative leaders could endorse. Vos also expressed concern that Governor Evers’ plans to legalize recreational marijuana through the state budget could hinder Republican backing. He also confirmed that the Senate and Assembly had not reached a consensus.

These statements followed Senate Majority Leader Devin LeMahieu’s remarks to the Milwaukee Journal Sentinel that his caucus, which had previously been an obstacle to marijuana legalization in Wisconsin, was “fairly close” to backing a medical marijuana initiative.

Similar to LeMahieu, Vos has expressed that he would solely endorse a medical marijuana program designed to alleviate chronic pain. He emphasized that his stance on the matter is unequivocal, clarifying that the proposal is not intended to serve as a means towards legalizing recreational marijuana or creating a novel industry that generates significant Revenue for the state. Instead, the goal is to ensure that individuals with chronic illnesses can attain relief that enhances their quality of life.

Vos stated that he is committed to ensuring that the medical marijuana proposal serves the needs of individuals suffering from chronic diseases and does not serve as a gateway to legalizing recreational marijuana in the future. He expressed confidence that his caucus would not endorse such a plan as it would not be in the state’s best interest. Vos emphasized his determination to ensure that the proposal addresses the needs of those with chronic illnesses.

Meanwhile, in his reelection campaign, Evers pledged to reintroduce a proposal to legalize marijuana in the forthcoming budget. The plan would necessitate purchasers to be at least 21 years old and is projected to generate $166 million in revenue, which Evers aims to allocate to bolster school funding.

Recent polling conducted by the Marquette University Law School in October revealed that 64% of Wisconsinites support legalizing marijuana for any purpose. In a 2019 survey, over 80% of Wisconsinites supported implementing a medical marijuana program.

Conclusion

The revenue estimates from Illinois’s marijuana sales highlight the potential benefits of cannabis legalization in Wisconsin. Despite the strong public support for medical marijuana and recreational legalization, Republican lawmakers have obstructed progress. However, recent statements from GOP legislative leaders indicate a growing interest in creating a medical marijuana program.

While this is a step in the right direction, it’s crucial to note that Wisconsin is missing out on significant tax revenue that could be used to fund essential public services. Legalizing marijuana could generate millions of dollars in revenue while reducing the negative impacts of the war on drugs on communities across the state. With public support for cannabis legalization increasing, it’s time for Wisconsin lawmakers to listen to their constituents and take action on this issue. (Full Story)

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