Marijuana Tax Revenue Will Now Benefit Children and Their Families
Anchorage, Alaska, will soon benefit from an additional $5 million to $6 million a year in child care and early education funding, thanks to voter-approved Proposition 14, also known as the “Take Care of Kids” measure, in April. A 5 percent sales tax on marijuana purchases has existed for years, but that money will now go to the welfare of children and their families, rather than to the city’s general fund.
The idea for the ballot measure stems from a realization that child care is often difficult to access and unaffordable throughout Alaska. Last year, the U.S. Chamber of Commerce Foundation estimated that the state loses about $165 million a year due to a lack of available child care. High-cost and low-availability child care is nothing new for Alaska residents, but the epidemic has exacerbated these problems. “We’ve seen that even with ARPA funding, child care centers are struggling,” said Trevor Stowers, president and CEO of the nonprofit Alaska Children’s Trust, one of the main supporters of the ballot measure.
The specific ways Proposition 14 funds will be used to benefit young children will be decided in 2024, but advocates hope to use the money to make child care and early education more accessible to parents, while taking steps to improve providers’ wages and benefits. Stowers said, “Next year, we’ll have some focused conversations in our communities with parents, providers and experts to determine which practices will be successful.”
Attitudes toward marijuana legalization in the U.S. have shifted dramatically since 2014, when Colorado and Washington became the first states to allow the sale of cannabis products. Twenty-four states have now legalized recreational marijuana, and more are expected to follow suit in the coming years, opening up new possibilities for using tax revenue to benefit children and families. In 2022 alone, states have reported $15 billion in tax revenue from recreational marijuana sales, not including tax revenue from medical marijuana.
Elizabeth Gaines, founder and CEO of the Children ‘s Funding Project, said, “If there are marijuana tax revenues, we think early childhood and youth development should get some resources first.” The Project, a nonprofit organization, has helped advise supporters of Anchorage ballot measures and has co-published a helpful scratch-to-scratch guide for those interested in creating a voter-approved children’s fund. Gaines continued, “In the short term, it’s not a bad path for early childhood advocates to take.” At the same time, he warns, “It’s not enough to turn to marijuana to support early childhood development.”
The first step in considering a voter-approved fund like Anchorage’s is to understand that localities in a given state have the authority to levy and earmark taxes for special purposes. “I think there is a lack of basic understanding of the limited nature of local taxing authorities …. In many states, you can’t levy a special-purpose tax from anything but property taxes or sales taxes, and the options are really limited,” noted Olivia Allen, co-founder and director of strategy for the Child Sponsorship Project.
Anchorage advocates made several strategic decisions that helped ensure a successful outcome for the ballot measure. The fact that a marijuana sales tax already existed in Anchorage made it more palatable to voters than advocating for a new tax. Stoll said, “Through conversations, we knew that the people of Anchorage were more inclined to utilize existing funding sources than to impose a new tax.” In an effort to eliminate the marijuana industry’s opposition to the measure, advocates reached out to the industry early in the process. “We reached out and really worked with the marijuana industry. They weren’t in favor of it, but they weren’t totally against it either.” Stoll added.
Advocates also emphasized engagement with more conservative voters who may be wary of government spending on child care and early education. “People want to know where their money is going and for what purpose. Neither side wants a blank check. They want to know why you need it, where it’s going, and that there will be accountability,” Stoll said. After engaging with the community and hearing concerns about possible school closures, advocates emphasized that if the ballot measure is successful, some of those schools may remain open because early education classrooms could be located in elementary schools. Stoll said, “This is important not only for conservatives, but for all community members because people don’t want their schools to close.”
Stoll and other advocates are excited about Proposition 14 funding and the possibility of increasing high-quality child care and early education in Anchorage. Of course, the work doesn’t end once the vote passes. Once the funds are used to help children and families in Anchorage, it’s important to communicate to the public how these funds will benefit the city to ensure the long-term viability of the campaign. “If people don’t see value in the way the money is being used, they’ll come looking for it. Ten years from now, you’re going to want the community to understand in case someone gets elected and says, ‘There’s $5 million, let’s pursue it,'” Stoll warned.