Marijuana Tax Revenue Offers Solution to Los Angeles Homeless Issue


In the last two years, homelessness in Los Angeles has increased by 12 percent. This rise has caused city officials to recognize the severity of the situation and discussions regarding how to solve this problem have begun. A $2 billion dollar budget plan was created last month to fix the problem over the next decade but resources for Los Angeles County, while improving, still cannot cover such a lofty cost. This has led city officials to contemplate different ways of generating funding. However, a recent proposal pointed out that medical marijuana tax revenue from both sales and cultivation could be used to put a sizable dent in the price tag of the ambitious but much-needed project. This has been supported by further talk of legalizing marijuana and using the tax money to fund the plan.

Tax Increase Too Much for Many Patients

LA’s notorious homeless problem may find assistance in taxing marijuana.

There is great concern by medical marijuana advocates and patients that putting an extra tax on medical marijuana is unfair. Many patients have expressed financial hardship and fear that an additional tax would result in their medication being unaffordable. The likelihood of a tax increase setting marijuana sales and purchases back to black market dealings can’t be ignored. The current proposed tax rise is 15 percent; a high enough increase to warrant concern in patients.

The Potential of Recreational Marijuana Legalization

A funding proposal that suggests marijuana tax revenue as a solution talks about how legalizing it would create a massive income stream for the state, staring, “Marijuana is a new product in the marketplace and could be a significant source of new revenue.” Legalizing the recreational use of marijuana for adults over 21 years old has created massive income in marijuana tax revenue for states like Colorado. This would bring in more than enough to cover the budget needed to fix homelessness in Los Angeles over the next 10 years. However, taking this step would require writing and voting on marijuana legislation. It would then require implementing the plan for legalization.

Alternatives to Marijuana Tax Revenue

Angelenos love their marijuana so legalizing recreational weed may see large proceeds.

Other alternative sources of funding for the initiative include a $1 billion dollar bond issue that would cost homeowners an extra $51 in taxes for a $328,000 house in Los Angeles. This would only work if 2/3 of voters allowed it to pass. Other options include adding real estate document fees (estimated to raise $30 million), higher real estate sales tax (generating a possible $167 million), raising city tax by 0.25% (adding an estimated $122 million), creating parcel taxes (contributing $7.8 million) and adding a 12 percent tax on billboards (throwing $24 million into the budget).

There are currently estimated to be approximately 254,000 homeless people scattered throughout Los Angeles which is a number that inspires a definite concern for the city. It’s a problem that is increasing exponentially on an annual basis and has obviously hit a critical level for government officials. One way or another, the 10 year plan needs to be initiated and funding will be needed. Recreational marijuana tax revenue seems to create that funding through a whole new source that wouldn’t add financial pressure to medical patients, the city, or its residents.


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