Positioning themselves for a monumental showdown with the state, a growing number of cities and towns in Oregon are racing to impose local taxes on recreational marijuana before next month’s vote on whether to legalize the drug.
Last week, Hillsboro joined at least a dozen municipalities that have approved or are considering taxing legal pot, despite language in Measure 91 aimed at preventing exactly that. The hope is to pressure state lawmakers into amending the law, if it passes, to allow local governments to levy additional sales taxes — otherwise, cities will find themselves waging an uphill battle in court, legal experts say.
One thing is certain: There will be a legal fight if voters approve legal marijuana. It’s just a question of where.
Section 42 of Measure 91 states: “No county or city of this state shall impose any fee or tax … in connection with the purchase, sale, production, processing, transportation, and delivery of marijuana items.” Section 58 takes it a step further: “(the state law) shall be paramount and superior to and shall fully replace and supersede any and all municipal charter enactments or local ordinances inconsistent with it.”
Even so, the list of localities seeking to impose their own taxes keeps growing by the week. The issue has received even more attention as larger cities in Washington County are weighing such proposals. Leaders in Forest Grove also passed a 10 percent recreational marijuana tax on Sept. 22, and officials in Cornelius, Lake Oswego and Oregon City approved similar ordinances this past week.
To the east, Oregon City has approved a tax, and officials Gresham, Troutdale and Fairview are considering following suit.
Many, including officials in Hillsboro, are angling to be grandfathered into the law by the state Legislature if Ballot Measure 91 takes effect next year.
“If [Measure 91 is] passed, the state has the sole taxing authority, so from a legalperspective, there was an interest in getting our council this option ahead of that,” said Hillsboro city spokesman Patrick Preston said prior to the vote.
Some attorneys representing city governments contend the measure’s language, while seemingly clear-cut, oversteps the state’s authority to regulate local laws. The argument reaches back to Home Rule, a longstanding legal principle in Oregon and elsewhere that protects localities’ right to govern themselves.
“The city has the authority to do what it wants as long as it’s constitutional, unless there is a clear statutory prohibition,” said David Lohman, the city attorney for Ashland, which in August became the first city to approve a tax.
Because there is no state law to contradict — at least not yet — the local taxes should be allowed to stay, Lohman said.
“I would hope the Legislature would make it very clear that what we enacted is allowed,” Lohman said. “We don’t want to have people battling in court about this. Let’s make it very clear, by statute.”
The measure’s advocates aren’t buying their reasoning.
“It seems like they’re doing exactly what I think we pretty clearly intended couldn’t be done,” said Dave Kopilak, the chief drafter of Measure 91. “They just look around and what everyone else is doing and figure they need to do something before Election Day.”
Measure 91’s drafters copied the language of the two sections nearly verbatim from the state liquor code, Kopilak said, which prohibits municipalities from collecting local taxes on alcohol.
If the state Legislature refuses to grandfather these cities and towns, the next step would inevitably be a battle in court, legal experts say.
“This tees up pretty hardcore for a state versus local government lawsuit,” said Hilary Bricken, a Seattle-based recreational marijuana attorney. It would be a hard sell for the cities, she added, considering Measure 91 is so explicit in its intent.
Oregon’s proposal gives state lawmakers more leverage to change pot laws than in Colorado or Washington. Colorado’s ballot measure came in the form of a constitutional amendment, and Washington’s requires a supermajority vote for any changes within the first two years.
Measure 91 contains no such restrictions, thus making the state Legislature an obvious entry point for those seeking reform, said Leland Berger, a Portland marijuana attorney. If the proposal passes, lawmakers could change it during the next session.
“It’s challenging to speculate on what the Legislature may or may not do,” Berger said. “They certainly have the legal authority to modify an issue, but I can tell you on both sides of the aisle, there’s a certain respect for the will of the people.”
Backers of Measure 91 intend for top-down control in order to keep prices low enough to compete with the black market. In return, 20 percent of the revenue collected by the state would be returned to local law enforcement.
The amount would be proportional to each place’s population until 2017, after which it would depend on the number of dispensaries in each city or town: The more dispensaries, the greater the tax revenue.
“I think localities should be really happy and realize the state is taking chunk of the money and giving it directly to them,” said Tamar Todd, an attorney for the Drug Policy Alliance, which supports Measure 91.
Some local leaders, though, say a local tax is a way to deter marijuana sellers from moving in without having to wait for a local ballot measure, as the proposal would require.
“I want it to be a deterrent,” Troutdale Mayor Doug Daous said at a city council meeting last month. “I don’t want to be the city that’s attractive to the sales of marijuana.”
But even fellow opponents of the measure agree a win for cities would be difficult if the issue ends up in court.
“The reason you see city councils scrambling to do it is a very thorny legal issue,” Clatsop County District Attorney Josh Marquis, a leading opponent of marijuana legalization, said at a Washington County Public Affairs Forum debate Sept. 29. “I suspect your cities are going to spend hundreds of thousands of dollars each fighting this.”
— Ian K. Kullgren
Luke Hammill of The Oregonian staff and Eric Apalategui contributed to this report.