School funding from pot taxes proposed in Proposition AA surprised officials in control of the fund

DENVER - If Colorado voters approve a proposed set of taxes on recreational marijuana next week, a state school construction fund could get $40 million a year. It is money officials say the fund needs, but didn't actually ask for.

Proposition AA would create a 15 percent excise tax on marijuana when it is sold wholesale from a cultivation facility and a 10 percent sales tax on retail marijuana sold to individual consumers. That is in addition to the existing 2.9 percent state sales tax and does not include any taxes created and approved within a local municipality.

The first $40 million raised by the excise tax each year would be earmarked for public school construction.

"According to the state's analysis, we'll probably hit $27 million in the first year and upwards of $40 (million) within a couple years," said Brian Vicente, one of the authors of Proposition AA.

The Building Excellent Schools Today fund, administered by the Colorado Department of Education, has doled out more than $1 billion since it was created in 2008. It has helped to pay for new roofs, boilers and what will become a new K-12 school in Creede.

Leanne Emm, the associate commissioner for public school finance with the Colorado Department of Education, said the fund needs $14 billion to address all school construction needs.

"There hasn't been enough money to go beyond really fixing the worst of the worst," she said.

7NEWS reporter Marshall Zelinger asked how the BEST program came to be linked with the passage of marijuana taxes.

"We did not have any conversations, to my knowledge, with anyone regarding being a recipient of any of the funds," said Emm.

"When did you find out that you were going to be associated with the passage of (Proposition) AA?"

"Ah, pretty much when we saw the ballot draft language," said Emm.

Zelinger asked again, "It was a surprise?"

"Yes."

Vicente said that is not quite how it happened. He told 7NEWS about speaking with the fund's attorney, a bonding agent at the bank and the teacher's union.

"We had a number of conversations with folks that were involved with BEST," he said.

But 7NEWS confirmed none of those are involved in deciding how the fund's money is spent.

"They may not have directed us to the head of the BEST program, but we certainly met with folks associated with that program and everyone uniformly said they needed money," Vicente said.

The issue is complicated by an audit released in September that suggests BEST doesn't properly spend the cash it already receives.

"The Assistance Board has awarded over $1 billion in state and local funds as part of the Program without identifying critical public school capital construction needs and prioritizing those needs throughout the state," the audit said.

Auditors found that "The Assistance Board funded projects that were classified as low importance while denying projects classified as high importance."

"Could it have been ranked in a better method, yes," Emm admitted. "Every award has helped students in the state."

She also told 7NEWS the program plans to follow all of the recommendations included in the audit and they are pleased to be considered for the needed funding from Proposition AA.

"We think giving public school construction money is a good idea, so we hope that they will take that audit seriously and use the taxpayer money wisely," said Vicente.