Blog note: this article references a Shasta County Grand Jury report.
OROVILLE — A motion to put a tax measure on the November ballot to charge cannabis businesses up to a 10 percent sales tax passed with a 5-1 vote on Tuesday from the Oroville City Council.
Mayor Linda Dahlmeier was the sole dissenter on the motion, which was made by Councilor Marlene Del Rosario and seconded by Linda Draper. Councilor Scott Thomson was absent.
Commercial cannabis activity is currently banned in Butte County, including in Oroville.
While some residents thought it was “high time” to move forward, a slight majority of public speakers were less enthused with the decision – which, to be clear, does not mean the city will be handing out licenses anytime soon.
The vote was simply to put a general sales tax measure on the ballot, which would require a 50 percent plus one vote to pass. Revenue would go into the general fund and how to spend that money would be up to the council’s discretion.
SCI Consulting Group, which prepared the ordinance, said the city could expect to see $300,000 to $600,000 in annual revenue. The consultant said many cities the firm had worked with so far easily won two-thirds of the vote on tax ballot measures.
With Thomson and Dahlmeier against, the council voted in February to hire SCI Consulting Group to do public opinion research and prepare related ordinances. The company held a public meeting on May 24 and brought together shareholders last week to discuss tax rates.
Neil Hall with SCI Consulting Group gave a brief presentation on the ordinance to the councilors on Tuesday. One slide showed nearby tax rates, including 10 percent in Davis and 4 percent on cannabis businesses in Sacramento.
While it was not a full house, dozens of public speakers stepped to the podium, including a couple of men who said individually that they were interested in going into business in Oroville but warned against setting a tax rate around 10 percent out the gate.
SCI Consulting Group recommended an initial 5 percent tax on cultivators, manufacturers and retailers, a 3 percent tax on delivery services and nurseries and no tax for testing operations. If the measure were to pass, the council could change these rates at any time, so long as the tax on a business did not exceed 10 percent.
Councilor Linda Draper wondered aloud if those rates might still be too high for businesses getting started. She said she calculated all of the taxes, including state taxes that they would be facing, to be over 20 percent.
Dahlmeier then asked what the point of allowing commercial cannabis activity would be if there wouldn’t be money flowing into the city, which is facing major budget woes. Draper replied that no one was suggesting a zero percent tax.
The two continued to butt heads throughout the evening. After regular business concluded, Draper said that Dahlmeier had originally proposed taxing cannabis businesses as a means of bringing in new revenue, in a brainstorming session with city staff. The mayor said the accusation was a “flat out lie.”
Draper then stated that former Acting City Administrator Don Rust, current city employee Dawn Nevers and Vice Mayor Janet Goodson were also in the room where it happened.
Dahlmeier and Del Rosario had a spat as well and were seen arguing behind the dais after the meeting. While Hall with SCI Consulting Group was presenting to the council, the mayor interrupted to say that Del Rosario had something to add.
Del Rosario, looking stunned, asked, “What?” She said that another councilor had leaned over to say something to her, but that she had not uttered a peep.
Public comment on the tax measure
A couple of members of the public asked if council members would be attending the National Night Out event in August and implied that they would hear a lot of backlash from the community on this issue if they showed up.
Resident John Mitchell, who was part of the stakeholders meeting, said he was in opposition to the city allowing marijuana businesses at all but thought the tax revenue should have a designated purpose – which would require a two-thirds vote to pass. Mitchell also said he thought the tax rate should be higher.
Several people, including former councilor David Pittman and Laura Page with the office of Rep. Doug LaMalfa, R-Richvale, brought up a recent grand jury report on the city of Shasta Lake. They said the report was concerning and the council should take a look at.
Resident Celia Hirschman said that as a certified health coach, many of her patients with illnesses like epilepsy saw benefits from medical marijuana and that much of the discussion from the opposition was “archaic.”
John Miller George, speaking in favor of the tax measure, pulled out his vaping device, set it on the podium and declared that it did not cause cancer. He said the councilors considering the motion were “ahead of their time.”
June 19, 2018
Chico Enterprise-Record
By Risa Johnson
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