2026-10-13 - Finance Committee

00:05[music]

00:14>> Good afternoon.

00:16Welcome to this finance committee

00:18meeting and today we're going to have

00:19the discussion about um cannabis tax

00:23money. Hopefully Kathy can help us out

00:26with some answers.

00:28Um and I think we talked a little bit

00:30about it the last time we met at

00:33in the North End. So, the reason that I

00:35wanted to meet is because a lot of our

00:37constituents have been saying that you

00:40know, they thought that when we approved

00:43to have cannabis um dispensaries and the

00:46stores that we were going to be able to

00:49um

00:50benefit from

00:52I guess the taxes that they're going to

00:54be paying. So, I guess I just wanted

00:56some information on that. Do you know

00:59how much is getting collected? I should

01:01have asked the assessor's office to be

01:02here to be able to um

01:04>> uh we we use a million dollars and I I

01:06believe when we do the uh presentation,

01:08a million dollars is in the budget for

01:10the uh in the general fund budget. So,

01:12it does help. It helps offset the

01:14million dollars.

01:15>> About a million dollars.

01:18>> All right. Well, um and again, you know,

01:21constituents want a a tax relief. Um so,

01:25they're not seeing that and they said

01:27that um they say all the time that they

01:30were under the impression that we would

01:32be able to you know, benefit from. So, I

01:34guess

01:34>> benefited by a million dollars. If not,

01:36we would have to cut a million dollars

01:37out of the budget. So, there is a

01:38benefit.

01:39>> Yeah. Yeah. Okay. Well, I will be um

01:42passing that information along. Do you

01:44have any questions on Council Blount?

01:46>> I do. Thank you. Um Madam Chair, uh good

01:48to see you, Kathy.

01:49Um good to see you get to see you as

01:51well.

01:52Uh

01:54so,

01:55let me

01:56help me get my my head straight here.

01:58So, we passed a canna- the cannabis pass

02:01a couple of years ago in the community

02:02reform,

02:03right? And we collect 1/3

02:07of the tax that goes into the city.

02:10I do believe there was a lawsuit that

02:12got settled a while back.

02:14Can you tell me before

02:16Can you tell me a little bit about that

02:18lawsuit and what happened to it? Because

02:19I think that lawsuit was resolved.

02:21>> There was a lawsuit um and in the HCA

02:24they were uh charging additional 3%.

02:27>> Okay.

02:27>> Um it was then uh deemed unallowable by

02:30the state, so we had to pay back the two

02:33we the law department negotiated and we

02:34paid back money to the two um Insight

02:37and another one.

02:38Uh we paid back money. We took it out of

02:41that um stabilization fund that was set

02:43up that the council set up with the

02:45mayor.

02:46Uh so, there is a current balance in

02:48that.

02:49>> And how much did we pay out?

02:51>> We paid out 1.4 million.

02:54>> It was a lawsuit?

02:55>> Yes.

02:55>> To Insight and

02:57>> And I can't remember the other one, I'm

02:58sorry.

02:59>> And that also went a couple of years.

03:01>> Yes.

03:02>> So, we were charging 6% tax total. Three

03:05for the state, three for us, and now

03:07we're only charging 3%.

03:09Now, out of the

03:12the money, so we can give you a quick

03:14refresher. What can the money be used

03:17for?

03:17>> The city council set up a state with the

03:2033% of that money goes into a

03:22stabilization that the city council set

03:24up with the mayor

03:25and it can be used uh for neighborhoods

03:28within 1.5 miles of a marijuana

03:31establishment and is used for

03:33educational recreation programming for

03:35youth and adults, neighborhood business

03:37incentives, improvements on

03:39infrastructure, recreation, and

03:41community sites, and other needed

03:43initiatives.

03:45>> Okay.

03:46And so, I think you said roughly we have

03:481.something.

03:49>> 1.7 million.

03:51>> That comes in every year?

03:53>> No. No. No. That's a total what you have

03:55in there now.

03:56In in 25 it took it we took in 543,000

04:01in 26 we took in 609,000.

04:07So the total you have available in that

04:09stabilization fund is 1.7 million

04:12dollars.

04:14>> And that if I may Councilwoman that loss

04:18was because of the host community

04:20agreement, right?

04:22Okay. I'm going to acknowledge

04:23Councilman Click Bruce.

04:25Okay.

04:26>> Okay. Thank you. Thank you for me.

04:28Kathy

04:29um

04:31Okay.

04:36So it's very it's very targeted to use

04:39that can be used for within that 1.5

04:41million mile radius.

04:42>> council had it. Yes.

04:44>> Okay.

04:44>> You you guys put together the um

04:46agreement.

04:47>> So whenever there's a a cannabis store

04:50that 5-mile radius

04:52>> That 1.5. Yeah.

04:54>> 5

04:551.5 miles?

04:56>> Yes.

04:59>> So so Kathy um

05:02So with regards to the uses and I'm just

05:04brainstorming here

05:06and thinking aloud

05:08um

05:09I'm sure there's a lot of uh

05:10things that we can put that money into

05:12work.

05:14What can we in terms of because as you

05:17know I'm about to I want to talk to you

05:19about the next time we meet. Mhm. And

05:21we're going to have that discussion

05:22starting

05:23>> October 20th.

05:25>> So and there's just just to put an idea

05:28on the table. Can we use a portion of

05:31that money to to put it into the mayor's

05:34new targeted tax relief program

05:36uh which we approve and I think the

05:38mayor 2 weeks ago put it out already. So

05:42and and

05:44it's a good thing. I supported it. I

05:45supported it. But that needs to be

05:47funded right so right now that has to be

05:50on a monthly basis people would donate

05:52into that program mostly like a good

05:54energy fund back then

05:57uh

05:57but can that money be used can we

06:00support some of that money to sort of

06:01start kickstart this program?

06:04>> In my opinion counselor you would have

06:06to change

06:08um

06:09council order.

06:10>> Excuse me.

06:11>> Which you can you can I mean the you'd

06:13have to have the mayor

06:16the mayor would have to then you'd have

06:17to work with the mayor and you could

06:19draft something outline something and

06:20send it to the law department a draft of

06:22the specifics and then they could put

06:24something together and then you'd have

06:25to present it to

06:26>> How do you feel about it counselor?

06:28>> I

06:28I I think that would be a good use it's

06:30what you have to do is actually make

06:31sure you know what parameters. Do you

06:33want it to be available every year? Do

06:35you want to put a certain amount in it?

06:37Are you going to have other uses? I I

06:39mean I think it's a great idea.

06:40>> Thank you I thank you because I I one of

06:42the things but then chair

06:44is that I do think that the the property

06:46tax relief

06:48um

06:49we've been talking about this now since

06:51I've been in the council now six years

06:53since

06:54and every year it's the same discussion

06:57the same discussion it needs to be

06:59sustained you know how does that get

07:01sustained? Everybody has different

07:03ideas.

07:05I saw it coming back.

07:06uh

07:07but I still believe that with the target

07:09of the tax relief Kathy and please

07:10correct me if I'm mistaken

07:12that another one deviates too much from

07:15the original subject but then chair

07:17that

07:19the the way we're doing this now

07:22with the target of the tax with the tax

07:24relief

07:25for every million dollars in that we're

07:27putting into it is a $15 savings.

07:31So I think traditionally we put in like

07:33five or eight million dollars so that

07:35comes out to be about what anywhere

07:37between 45 to 90 dollars.

07:39But then with the property value

07:41increase that gets lost in translation.

07:44Uh the target of the and that goes to

07:46everybody including the businesses. But

07:47the target of the target

07:48>> everybody.

07:49>> is more specific. It's targeted to those

07:53categories such as veterans, such as

07:57blind.

07:59So people will have a more direct higher

08:01increase.

08:03Is that correct? Okay. Uh

08:05thank you, Beth. So Madam Chair, I think

08:07a later one that's part of this

08:08conversation with the canal cuz I think

08:10that's something we should explore.

08:12Uh if that the council ordinance to

08:14change, I think that's is worthy of

08:16pursuing because we are you know this

08:18canal money

08:20can be finally put to

08:22be good to straight good use.

08:24>> So right now, uh thank you Fred coming

08:27up for the chair. Uh so right now that's

08:30stabilization fund. How do people access

08:33that money?

08:35>> Stabilization, you can't access it.

08:36Right now the city council has it. The

08:381.7 million dollars.

08:40>> Okay. So so how do we access it? So we

08:45say

08:45>> to decide what you want to use it for in

08:47the program.

08:48>> You like the CPA fund.

08:49>> You have to decide what you want to use

08:50it for and vote on the council floor, if

08:52I'm correct.

08:53>> Lindsay, I think that's

08:53>> The mayor The mayor has to bring forth a

08:54financial order just like anything else.

08:57So if the council came up with, you

08:59know, an eligible use for the funds,

09:01coordinated with the mayor, it would

09:03just be a financial order, which would

09:05be a transfer out of that account into a

09:07separate fund for whatever specific

09:09>> still would have to be within that 1.55

09:13mile radius.

09:14>> Yeah, whatever the parameters are set up

09:16per the per this this ordinance. If you

09:18want to change this ordinance, you would

09:20have to change change it. You would you

09:22would yeah, draft it, submit it to the

09:24mayor, and ask him to support the new

09:26ordinance. And then you'd have to vote

09:27on on the floor.

09:29>> So I just see it from what that list

09:31that you mentioned, you know,

09:33big recreational use, right? I think a

09:37lot of neighborhoods

09:39benefit from that because there's a lot

09:41of neighborhoods that don't have those

09:43things. And do you want to give an

09:44example?

09:45Uh

09:46so, I'm I'm wondering if there's a way

09:48that we can move forward with that

09:51because I know when we have our

09:54tax rate conversation

09:56the tax relief

09:58question and comments will be there.

10:01Once we look at how to figure that out.

10:04And I know the meeting that we had um

10:07you know

10:08cutting cutting things out of the budget

10:11is not the answer, right? Um

10:14finding I think finding ways to be more

10:16efficient and more effective with what

10:19we have um so that we don't have to keep

10:23increasing the budget every year. I

10:25think it's a better way of doing things.

10:28That's like as as a family, that's what

10:30we have to do, right? We can't we're not

10:32going to get extra money because the

10:34light bill went up, the gas bill went

10:36up, groceries went up. Um so, finding

10:39ways to

10:40I guess live within our means

10:43is is a way to do it, but that's outside

10:45of the cannabis conversation, so. Um

10:48okay, any other comments or questions

10:50about the cannabis um

10:54call it cannabis stabilization fund?

10:58>> Yeah, um Madam Chair, I have a question.

11:03That's okay.

11:04>> Go ahead.

11:06>> Um so, I missed the first part of it.

11:08So, did is there

11:10um

11:11is there a process where we can access

11:13the money now? I know last

11:16I heard about it it was kind of tied up

11:18at the state level, so has that been

11:20rectified?

11:22>> Yes, that has been rectified.

11:23>> Yes, that was rectified. They paid out

11:251.4 They paid back 1.4 million to the

11:28two um businesses. So, right now after

11:31we pay that there's 1.7 million left in

11:34the fund.

11:35>> Okay.

11:36All right. I just want to

11:38I I I heard Counselor Davis' comments

11:41earlier, which wholeheartedly I think

11:43the whole city

11:45should benefit

11:46from some type of relief. If we can come

11:49up with a a process for that, great.

11:52But, I also want to hone in on the fact

11:53that

11:55some areas are more affected than

11:58than others, obviously, with some of the

12:01dispensaries located. I'm going to give

12:03one example, which is right in the ward

12:05my ward, Ember.

12:07Where we have tons of traffic and tons

12:09of issues going on. So, I just want to

12:11be, you know,

12:13prepared for the the pushback we may

12:15receive with some of the residents that

12:18actually have to deal with

12:20that traffic and all concerns in their

12:22particular area. So, I'm I'm all for

12:25supporting,

12:26you know, something we come up with a

12:28comprehensive plan to do that, but I

12:30also want also us to to recognize that

12:34there are some real issues that are

12:35happening in neighborhoods, and how can

12:37we use this money to

12:39give back to those that actually have

12:42the dispensaries in the area. So,

12:45just want to put that on the record.

12:47>> Yeah, and and I agree with that,

12:49Counselor King Bruce.

12:50You know, these funds, that's what they

12:52were made for, and that's the reason

12:55that I'm asking about them is because I

12:58know for a long time they were tied up,

13:00and we weren't able to have access to

13:02them. So, finding a way to be able to

13:04use them the way that they were

13:06intended, you know, and of course I'm

13:08always for tax relief for the residents.

13:12And this targeted tax relief fund that

13:15the mayor

13:16initiated a couple of years ago, I think

13:19he funded a million dollars. There's a

13:20million dollars in there right now.

13:22So, finding a way to, you know, continue

13:25to fund those kind of things.

13:27The The thing with the targeted tax

13:29relief is that it's targeted to people

13:33who

13:34um

13:35you know, of course they need the funds.

13:38I like it veterans, I like seniors, you

13:40know, people with disabilities.

13:43Um and then we also have people in our

13:45city who are struggling, you know,

13:48there's seniors of course and they're

13:50still struggling. They don't probably

13:51fit into those categories, but they

13:54still need um the help. So that's a

13:56whole That's conversation again for next

13:58week. I don't want to talk about that

13:59now, but for the stabilization fund with

14:02the cannabis um tax money created I

14:05would like for us I agree with Council

14:07uh Cliff Bruce that we should find a way

14:10to put that money into those

14:12neighborhoods that are affected by that,

14:14you know, and um

14:16the the impact that it's having it might

14:19not be, you know, immediately seen, but

14:22I think, you know, because the money is

14:24there and because a lot of those

14:25neighborhoods don't have those

14:27resources, it would you know, behoove us

14:30to to continue along those lines when we

14:33first start those conversations.

14:35Um I acknowledge our Council Council

14:38President Oh Whitfield, you have your

14:40hand up, ma'am?

14:41>> Yeah, sorry I'm late Council um Madam

14:44Chair.

14:45Um grateful Turk Festival first I wanted

14:48to say it was great. I had a good time.

14:50>> Thanks for coming out.

14:51>> Got the food that I wanted. Um I know

14:54that I missed the first part of the

14:55meeting, but I just wanted to circle

14:58back and see if any of those funds have

15:00been

15:01used or distributed and what's in the

15:03accounts.

15:05>> Uh no, we just paid back that one the

15:08lawsuit um the 1.4 million. So what's

15:12left in the account is 1.7 million.

15:14Nothing's been used. It has to go The

15:16council has to put an order in front of

15:18the mayor. The mayor then has to at

15:19request the mayor and then the mayor

15:21would have to put a financial order in

15:22front of you, but um the city council,

15:25it's in a stabilization fund set up for

15:27the city council. So, you haven't um

15:29put together a plan yet.

15:32>> So, I think Madam President that that's

15:34something that we can start talking

15:36about.

15:37>> Yeah.

15:38>> And I'm making, you know, figuring out

15:40what we want. I like categories that are

15:44in the um the fund um and use it in that

15:48way to benefit the residents.

15:51>> Okay. That that is an option a

15:53opportunity.

15:55>> Mhm.

15:56>> Mhm.

15:57Thank you.

15:58>> Thank you, Madam President. All right.

16:00Anything else on on that? So, we're

16:03getting three We're collecting 3%,

16:05right? Of that 3% that we collect

16:09all of it doesn't go into this fund. 33%

16:12>> 33% Okay.

16:13>> And the other And the other one goes to

16:15the general fund.

16:16>> The other thing goes to the general

16:17right to general fund revenue.

16:22>> So, that means that we're really

16:23collecting

16:24over a million dollars, like

16:261.something.

16:27>> And um at 1.26, we collected 1.2 million

16:32went to the general fund, and um 609,000

16:36went into your fund.

16:41>> Great.

16:42>> So, I think that's over uh how many how

16:44many cannabis stores is there that we

16:46have here?

16:46>> I I don't know the number of stores off

16:48the top of my head, Council.

16:49>> No, we don't.

16:49>> I don't either, no.

16:51>> I I want to say maybe like 12 or 13, but

16:54I'm not sure. I don't know them.

16:58>> Uh Madam Chair.

17:00>> Yes, sir.

17:02>> Uh what was the categories again?

17:05>> Could you please say them again?

17:06>> Yeah, and these categories were set up

17:07by the city council.

17:09>> Yeah, I understand.

17:09>> Um education and recreational program

17:12programming for youth and adults,

17:14neighborhood business incentives,

17:15improvements to infrastructure,

17:17recreational community sites, and other

17:19needed initiatives.

17:21>> Okay. Thank you.

17:27>> Thank you.

17:31All right. So, we'll start having those

17:32conversations, I think,

17:34because

17:35regarding the targeted tax relief

17:39that's supposed to be Again, this is

17:41off-topic. Uh but, I know that I think

17:44that in the tax bills, people have an

17:46opportunity to check a box.

17:49Um

17:50Unfortunately, I'm going to say, like

17:53like for example, myself, when I get my

17:55tax bill,

17:57I just put it away, because it comes out

17:59of my thing, so I don't have to check

18:00the box. So, I think I'm wondering if

18:02there's a way for us to um

18:06maybe And um this is the assessor's

18:08office uh send something out

18:11specifically asking, "Hey, are you Do

18:13you want to participate in the targeted

18:14tax relief?" And I'm sure a lot of

18:16people would um if they knew about it.

18:20And it's probably not a lot. You could

18:22say $5, you know, of the quarter. If

18:25everybody did that, we'd have some money

18:27in here. So, yeah, maybe we'll have a

18:30conversation with the assessor's office

18:31regarding sending something out like

18:33that.

18:34So, I like that um

18:36funding idea.

18:37>> You're talking about people without

18:38escrows.

18:39>> Yeah. See, like my my bill, I get it,

18:42and it just gets paid in my mortgage.

18:45>> mortgage

18:45>> Um so, I don't need I don't even have to

18:47look at it or send it back because it

18:51gets paid. But, um I know some people do

18:54get it, and they have to look at it, and

18:56maybe they could check the box, but I

18:58think most people nowadays, if they have

19:00a mortgage, and they have um escrow in

19:03their mortgage, it just goes

19:04automatically.

19:06So,

19:07>> If If I may interrupt. Uh Kathy, in

19:09those cases like uh Councilwoman is

19:11talking about,

19:13uh,

19:13can the person send a check instead?

19:16>> Oh, yeah.

19:16>> On their own?

19:17>> Yep.

19:18>> And it will have to be, this have to be

19:19spelled out to be used dollars.

19:22>> I mean, yeah, if you don't want to just

19:23send a check, a random check to

19:25assessors, but I'd rather send it to the

19:26city and just say for targeted tax.

19:29>> So, anybody out there, any resident who

19:30feels generous could say, "I'm going to

19:32write a check for whatever, 25, 50

19:34bucks."

19:35>> But, I think a offer should be made.

19:37Like,

19:39I'd like to get a something in the mail

19:40saying, "Hey, do you want to

19:42give to the targeted tax relief?" You

19:44know, and and

19:46check that box, say, "Okay, every

19:48quarter I'll give $5 or something like

19:50that." And then people if people want to

19:52send a check, the offer needs to be made

19:55cuz I think a lot of people might not

19:56know about it. Um, and having, you know,

20:00having it brought up to the forefront, I

20:02think would be helpful. Just my thought

20:04on that.

20:05But, I guess we were off topic.

20:09All right. Any other, um, comments or

20:12questions about the cannabis,

20:15um,

20:16stabilization fund, I'm going to call

20:17it.

20:19No? All right. All right, well, this

20:22meeting is going to be adjourned.

20:24Thank you all.