ONTARIO — The City of Ontario is looking for some additional funding from the state’s disbursement of tax revenues from marijuana retail sales which is solely used for law enforcement; this is not an attempt to seek more local sales tax.
As Oregon state lawmakers prepare to head into their short legislative session on Feb. 3, a letter from the City of Ontario has been sent out.
City Manager Adam Brown sent out an email on Wednesday morning announcing that a letter has been drafted by the City Council and sent to Rep. Nancy Nathanson, D-District 13, regarding Oregon’s state marijuana tax local distribution formula, which must be used for law enforcement. Nathanson is the chairwoman of tje House Interim Committee on Revenue.
In the letter, it is stated that Mayor Riley Hill and Brown spoke to the House Committee on Economic Development during the 2019 session, and that the matter they wished to address had not been given sufficient attention.
Although the two had been looking for more local sales tax to be added to the 3% max that is currently allowed by the state for retail sales in the city, they also wanted to discuss the Marijuana Tax State Share Distribution.
The issue being brought up to state lawmakers is what Brown said is the “huge inequality” resulting from the current formula used to calculate the amount of revenue each city receives from dispensary sales.
That formula is based on population and not the amount of retail sales, and based on the fact that Ontario had the second-highest retail sales in the state in 2019 in just three months, the city wants the formula refigured.
The letter suggests Ontario’s location was not taken into careful consideration in regard to the structuring of the formula. In the formula, the local share of revenue is 25%, based on the number of dispensaries, and 75% based on population.
Brown said in a phone interview on Wednesday afternoon that a town with one dispensary but a higher population than Ontario would get a disproportionately higher amount of the overall revenue. The letter states what Ontario should be getting as $653,490 versus what Ontario is getting as $49,700.
However, as was mentioned in the 2019 bid for a higher local sales tax, the population base for Ontario is skewed, as it should include the Boise metro area with a population of 750,000. Furthermore, it is common knowledge that dispensary parking lots are often full of vehicles with Idaho license plates.
Ontario Police Chief Steven Romero in a recent interview “there are so many Idaho plates” at the dispensaries.
He further stated that the state’s formula is “not in our favor,” and is “flawed.”
Due to the fact it is based on population and not revenue, Ontario is essentially “subsidizing law enforcement in urban areas with more revenue by virtue of the formula,” said Romero.
Calling the formula “totally lopsided,” he said the amount that Ontario received was not enough.
The letter’s final statement reads: “The City Council is requesting immediate intervention in this short session to amend the distribution formula to reflect actual sales in a municipality.”
Leslie Thompson contributed to this article.