Protesters demand the suspension of Measure S, Humboldt County’s hashish excise tax, at a Jan. 18 rally. | File photograph by Andrew Goff.
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Confronted with mounting cries of protest from struggling hashish farmers, the Humboldt County Board of Supervisors on Tuesday will think about the prospect of implementing a Measure S tax aid program.
If authorised by a majority of the board, this system might enable qualifying cultivators to have their 2021 and 2022 excise tax payments postponed, lowered and even waived fully, although particulars of the plan have but to be labored out.
Such a program might additionally wind up costing the county hundreds of thousands — and even tens of hundreds of thousands — of {dollars}, doubtlessly forcing departments to enact hiring freezes, get rid of employees positions and in the reduction of on providers, together with some geared toward serving to hashish farmers.
Measure S taxes, which have been authorised by voters in 2016, get assessed to licensed cultivators based mostly on the dimensions and kind of their develop operations, starting from simply over a greenback per sq. foot of cover if the vegetation are grown open air to $3.255 per sq. foot in the event that they’re grown inside, beneath synthetic lighting. Combined-light grows, in the meantime, get taxed at $2.169 per sq. foot.
Whereas voter-approved taxes can’t be raised with out going again to the voters for approval, the textual content of the county’s hashish cultivation tax code specifies that the Board of Supervisors could repeal or amend the taxation code “in a way which doesn’t end in a rise within the quantity of the tax or broaden the scope of the tax imposed herein.” In different phrases, the board might implement this tax aid program with out consulting the voters.
Lately, and particularly over the previous six months or so, lots of the county’s 900-plus permitted cultivators have been clamoring for tax aid, each online and in public, as wholesale costs plummeted to all-time lows, largely as a result of overproduction within the state’s authorized hashish market.
Whereas some have questioned how the county’s lots of of small-scale growers can anticipate to reach the face of airplane-hangar-sized grows being authorised in different counties, state and native leaders have been sympathetic. The board’s Hashish Advert Hoc Committee, which is comprised of Second District Supervisor Michelle Bushnell and Fifth District Supervisor Steve Madrone, have heard the cries for assist, and this program is their try to supply some.
“Many cultivators have voiced concern that they won’t survive present circumstances,” the staff report for tomorrow’s agenda merchandise says. “The Hashish Advert Hoc Committee is anxious concerning the long-term viability of the Humboldt County hashish business, significantly these smaller farms who could have fewer monetary sources.”
The proposal being forwarded by the advert hoc committee would enable “qualifying cultivators” to use for a partial or full waiver of two years’ value of excise taxes. The report doesn’t spell out the precise standards for growers to qualify however says it might be based mostly on “want and precise revenue or losses incurred for tax yr 2021 and 2022.”
This system would additionally enable qualifying growers to postpone paying their 2021 and 2022 tax payments — which get assessed after annually is over — till 2024, at which era the payments could or might not be waived. Additionally, county employees plans to discover the choice of providing reimbursement plans, although the employees report notes that they should do “further analysis to make sure [any such plan] meets authorized and system constraints.”
In fact, the county tax invoice is hardly the most important expense for native hashish farmers struggling to realize a foothold out there. The state’s personal cultivation tax, which is calculated based mostly on weight somewhat than cover dimension, prices licensed growers roughly three to 6 instances greater than Humboldt County’s cultivation tax, in keeping with calculations that have been based mostly on figures from a 2013 Washington state study. (The mathematics is a bit squishy because of the variability in plant density, yield and different components.)
However, as famous by Humboldt County Growers Alliance Government Director Natalynne DeLapp in this week’s North Coast Journal cover story, state taxes are so much more durable to get repealed or modified. Whereas each Assemblymember Jim Wooden and Senator Mike McGuire have indicated that they’re prepared to sponsor hashish tax aid laws, success on that entrance is way from assured.
“With out aid on the state stage, all the burden for aid for the cultivators falls on the
county and its residents,” the county employees report laments.
That might wind up being a heavy burden certainly. The county collected $17.5 million in Measure S tax revenues in 2018 and once more in 2019. It collected $10.3 million in 2020, although it billed for $19.4 million, a lot of which can nonetheless are available in.
Whereas hashish tax revenues are anticipated to drop steeply through the present fiscal yr, this tax aid program being proposed might simply minimize $12 million per yr out of the county’s Basic Fund stability, in keeping with the employees report. With labor prices rising, such a big price range minimize would pressure the county to contemplate painful choices together with employees layoffs, an instantaneous hiring freeze for all Basic Fund
positions and/or reductions in sure packages and providers, “significantly these which might be instantly funded by Measure S, akin to Mission
Trellis.”
Humboldt County Financial Improvement Director Scott Adair on Monday stated it’s not all dangerous information on the hashish entrance. For instance, his company simply wrapped up a contract with School of the Redwoods to present no-cost companies schooling providers for business professionals taking part in the Project Trellis-funded Local Equity Program. Hashish enterprise house owners who’re not enrolled within the county’s fairness program can nonetheless take the courses at a lowered price, Adair stated.
And on Friday, Adair and his employees discovered that Humboldt County is eligible for an additional $3.4 million in state fairness funding for Mission Trellis. The fairness program goals to supply enterprise help providers to native hashish entrepreneurs who’ve been negatively impacted by the Warfare on Medication.
Adair stated the information got here with “nice timing [considering] how desperately the hashish neighborhood wants help proper now.”
Financial Improvement Coordinator Peggy Murphy stated CR can be providing programs on such subjects as human sources, enterprise planning, grant writing and hashish advertising and marketing. Lessons will meet Wednesdays from 6-8 p.m., she stated. Anybody with questions is inspired to reach out to the department (scroll to the underside of that linked web page) for particulars. There’s additionally extra info on the county web site, here.
Adair stated it’s troublesome for the slow-moving mechanisms of county authorities to satisfy the wants of an business for which the market circumstances can change so quickly. “So we’re continuously having to pivot or change course,” he stated. However Mission Trellis has offered providers to greater than 200 hashish professionals, he added.
A Mission Trellis replace can be on Tuesday’s board agenda, and it’ll embody an replace on a county-led advertising and marketing initiative that has turn into mired in controversy. With the hashish tax aid program into account, the advertising and marketing initiative might wind up being scrapped altogether, Adair stated.
Regardless, you must anticipate a variety of passionate testimony from the native grower neighborhood on Tuesday.
“We’re anticipating tomorrow to be considerably tumultuous,” Adair stated. “I believe it’s going to be a reasonably highly effective, possibly even emotionally energetic assembly.”
