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THE MEDIA: Speech

WHO SAID IT: Doug Ducey

OFFICE: Governor of Arizona

PARTY: Republican

THE COMMENT: “But once you got past enforcement, bureaucracy and the social cost of the legalization, there would be no money for our schools. It (Proposition 205) was actually a net financial loser for our state.”

THE FORUM: Marijuana Education Summit hosted by Smart Approaches to Marijuana on April 20, 2017, in Atlanta.

WHAT WE’RE LOOKING AT: Whether Prop. 205 would have been a net financial loss for Arizona.

ANALYSIS: Proposition 205, Arizona’s marijuana legalization ballot measure that did not pass last November, would have made it legal to carry, grow and use marijuana.

According to a fiscal analysis of Prop. 205 from the Joint Budget Legislative Committee:

“After distributing $8.6 million to DMLC (Department of Marijuana Licenses and Control) and DOR (Arizona Department of Revenue) and $6.8 million to localities of the $53.4 million in total Marijuana Fund revenues, an estimated $38.0 million in FY 2019 would be available for distribution to schools and DHS (Arizona Department of Health Services). In FY 2020, total Marijuana Fund revenues would increase to $82 million, of which $69.6 million would be available for distribution to schools and DHS.

The distributions would include:  

  • 40 percent would go to school districts and charter schools for education-related expenses, including teacher compensation, construction, and maintenance, resulting in projected distributions of $15.2 million in FY 2019 and $27.8 million in FY 2020.  
  • 40 percent would go school districts and charter schools for full-day kindergarten, resulting in projected distributions of $15.2 million in FY 2019 and $27.8 million in FY 2020.  
  • 20 percent to DHS for distribution to the Arizona Poison Control System for public education campaigns about the harms of marijuana, alcohol,and other substances, resulting in projected distributions of $7.6 million in FY 2019 and $13.9 million in FY 2020.”

A fact sheet presented by the anti-marijuana group Arizonans for Responsible Drug Policy, which helped defeat Prop. 205 last November, mentions projected social costs outweigh the revenue provided by legalization.

“While the legalization movement talks only about potential income, it never mentions the cost to society such as treatments, rehabilitation, counseling, accidents, enforcement, criminal violations, school suspensions, drop-outs and other education deficits,” the sheet reads.

Merilee Fowler, vice chair of ARDP, said via email that “there are many unintended consequences of legalization that produce costs for the state.”

She said the organization stands behind a report produced for Rhode Island by Smart Approaches to Marijuana — the organization that hosted the summit where Ducey spoke last month — which projects additional costs of implementing marijuana legalization such as “increased ER visits,” “marijuana concentrate extraction lab explosions,” and employee “absenteeism.” The report projects a total annual cost of $61.2 million, 126.6 percent of projected revenues for Rhode Island.

“I am not aware of a similar study done for Arizona, but I am confident that the data can be extrapolated to states other than Rhode Island,” Fowler said via email.

Daniel Scarpinato, a spokesman for Ducey, said via email that “the Colorado experience shows us that there are many unintended costs from recreational marijuana,” but did not provide any projections for Arizona showing such costs. 

BOTTOM LINE: According to a state analysis of implementing Prop. 205, the ballot measure would have been a financial gain for Arizona, if enacted. Groups opposed to marijuana legalization have argued there are additional costs associated with marijuana legalization, ranging from treatments and rehabilitation to criminal law enforcement. But, representatives could not provide support for Ducey’s claim that Prop. 205 would have been a “net financial loser” for Arizona.

THE FINDING: No stars: Unsupported.

SOURCES: Arizona Republic story on Prop. 205 defeat; Arizona’s Joint Legislative Budget Committee’s fiscal analysis of Prop. 205; fact sheet from anti-Prop. 205 group Arizonans for Responsible Drug Policy; report from Smart Approaches to Marijuana about Rhode Island marijuana legalization fiscal analysis.

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