Blowing Smoke: Ben Jealous’ “Pot for Pre-K” Numbers Don’t Add Up

By Mark Uncapher, MCGOP Chairman

While running to be Maryland’s governor, Democrat Ben Jealous has regularly promised:

“When I am governor, I will finally pass universal pre-K in Maryland. How will we pay for it? By legalizing, regulating and taxing cannabis for adult use.”

Both on the stump,[1]on his website[2]and as recently as an August 20 press call,[3]Jealous has repeatedly made this “Pot for Pre-K” campaign promise.

To be sure, Governor Hogan has also expressed his agreement with the goal of expanding Pre-K in Maryland. The challenge, however, is the cost. For four years the Governor has been able to expand education funding without new taxes.

Universal Pre-K has a steep price tag.  Maryland’s Department of Education estimates that offering “high quality pre-kindergarten” to the state’s 3 and 4-year-olds would cost $1.36 billion.[4] Their numbers are not hard to follow.  Maryland has about 150,000 three and four-year old children. Paying for a full day, school year-long program at about $9,000 per pupil then costs $1.35 billion. (Even this may understate the real eventual cost, since Maryland’s statewide K-12 public school spending averages $15,000 per pupil.[5])

Jealous’ problem is that TOTAL pot sales in similarly sized Colorado for 2017 were just $1.51 billion, broken between $1.09 billion adult-use sales and another $417 million from medical marijuana. From these sales, Colorado collected $247 million in taxes and fees revenue.[6] 

Assuming that Maryland’s pot tax rate will be comparable to that in Colorado and even considering that our state is 10% larger, the Jealous plan only provides 20% of the necessary funds to pay for universal Pre-K.

When pressed on their numbers at a damage control press conference, the Baltimore Sun reported that the Jealous campaign modified their revenue estimates, claiming “the state can raise about $378 million a year from taxing marijuana. The campaign arrived at that number based off tax revenues from the drug in Colorado, where recreational use is already legal.”[7]

Jealous’ new revised pot tax estimates still do not make sense.  Maryland pot taxes are very unlikely to produce 50% more revenues than Colorado.  Our state would be in direct competition with the District of Columbia, where the current lightly restricted medical marijuana sales regime remains untaxed because Congress has blocked D.C. from taxing or regulating the sale of marijuana.

Yet even assuming that Jealous pot tax revenues could produce $378 million, nearly another billion dollars for Pre-K funding would still be required. Currently, each penny of the state sales tax produces about $750 million in revenue, for a total of $4.5 billion.   Consequently, the equivalent of a sales tax hike from 6 cents to 7 cents per dollar would at least be necessary for the state to pay for universal Pre-K.

The Jealous “Pot for Pre-K” spending proposal comes along with a multitude of other big-ticket initiatives, not the least of which is his single-payer health care plan which would balloon state taxes and spending.

The bottom line is that Maryland cannot afford Ben Jealous.

[1]https://foxbaltimore.com/news/local/ben-jealous-we-should-pay-for-universal-pre-k-by-taxing-marijuana

[2]https://benjealous.com/issues/education/

[3]http://www.baltimoresun.com/news/maryland/politics/bs-md-pre-k-costs-20180820-story.html

[4]http://www.marylandpublicschools.org/Documents/adequacystudy/MDPreKComprehensiveAnalysis011316.pdf

[5]https://conduitstreet.mdcounties.org/2018/02/21/chart-compares-school-funding-per-student-county-by-county/; http://dls.maryland.gov/pubs/prod/InterGovMatters/LocFinTaxRte/Overview-of-Maryland-Local-Governments-2018.pdf

[6]https://www.usnews.com/news/best-states/colorado/articles/2018-02-11/colorado-pot-sales-hit-a-record-15-billion-in-2017

[7]http://www.baltimoresun.com/news/maryland/politics/bs-md-pre-k-costs-20180820-story.html