“There was a willingness to consider multiple ways to get enough revenue… This just happened to be the one that could get the votes.”
By Ben Solis, Michigan Advance
The Michigan Senate, after much hand-wringing by lawmakers worried about the impact of the marijuana industry in Michigan, voted Friday morning to pass a wholesale tax of 24 percent on all marijuana products sold within the state.
It is expected that the measure will generate $420,000,000 in additional revenue for the funding of road repair and construction during the new fiscal, an important component in the budget deal struck by Governor. Gretchen Whitmer, House Speaker Matt Hall and Senate Majority leader Winnie Brinks.
A failed vote would likely have shattered the deal, forcing the chambers to negotiate again and sending the governor back. This would also have sent the entire state government into shutdown. House leadership announced Thursday that they would not consider another continuing budget once the Wednesday passed budget expired at the end of October.
While many in the cannabis industry rallied to the Capitol, lobbying lawmakers against this legislation, it was the potential consequences of the deal failing that weighed heavy on their minds.
House and Senate approved their conference budgets for funding the entire government and K-12 education and higher learning on Thursday evening and Friday morning. But all that depended on passing the marijuana tax.
It passed on a 19-17 margin, with nearly as many bipartisan votes of opposition as support.
Brinks, along with the following Senators: Sarah Anthony (D-Lansing), Rosemary Bayer(D-West Bloomfield), Darmary Camilleri(D-Trenton), Mary Cavanagh-Redford Township), Stephanie Chang-Detroit (D), John Cherry-Flint (D), Kevin Daley-Lum (R), Erika Giess-Taylor (D), Veronica Klinefelt-Eastpointe (D), Dan Lauwers
Jeff Irwin, a senator from Ann Arbor (D), voted against the bill. Jeff Irwin (D-Ann Arbor) was one of its strongest opponents.
Irwin’s colleagues included Sens. Thomas Albert (R – Lowell), Joseph Bellino – (Monroe), Jon Bumstead – (North Muskegon), John Damoose – (Harbor Springs), Roger Hauck – (Mount Pleasant), Kevin Hertel – (D – Saint Clair Shores), Michele Hoitenga – (Manton), Mark Huizenga – (Walker), Ruth Johnson – (Groveland Township), Jonathan Lindsey
The day was spent in caucus meeting debating and whipping up votes for the tax to make sure it didn’t go away in the smoke.
Brinks and Hall appeared to be meeting frequently in the Capitol and entered offices for discussions behind closed doors. Whitmer called several groups of legislators into her Capitol Office throughout Thursday’s afternoon and evening.
Chang was among those legislators. He proposed on Tuesday an amendment that would reduce the tax rate from 40 percent to 20 per cent, but with a caveat: he had also included a link to his proposal for e-cigarettes and nicotine products. In an interview with Michigan Advance, Chang predicted that the amendment wouldn’t be adopted.
On Thursday night, as she left Whitmer’s office, she was asked whether she had spoken to the Governor about her proposal. Chang replied that yes, they did.
Chang declined to say how the Senate intended to vote about the proposed rate of 24 percent, which appeared to be in a state of flux. Chang also stated that at the time she wasn’t sure about the tax of 24 percent.
Conversations in the House were erratic as day and night went on. Hall, who was initially confident, thought that Brinks would propose the bill, which originated from the House. House Speaker also warned that failure to pass the measure would ruin their deal made with Whitmer for revenue on roads.
That would have also meant a new phase in the budget crisis—a real government shutdown, given Hall’s unwillingness to pass another continuation budget.
As several senators expressed opposition to the tax it was possible that Brinks could cause the deal to fall off the cliff. Key members of the House began to change their tone, from one of hopeful anticipation, to one of stark warnings.
It was only a matter of time before the Senate could muster enough bipartisan support to push the tax through.
Irwin, for his part, gave a speech in which he echoed some of the comments he made when this tax was first proposed.
Lindsey said in an address that he too would not vote yes. It bothered him to see some upper chamber members eagerly voting yes. He cited the possible impacts, including a potential shrinkage of the cannabis industry due to a greater tax burden as well as the closure of dispensaries in Michigan.
McBroom voted yes on behalf of the GOP. In his speech on the floor, McBroom said the industry has failed to fulfill its promises to the state to bring in new taxes to the coffers to a considerable degree. A right-sizing might be needed. McBroom stated that he would have liked to see the proposed tax rate even higher.
McBroom explained that the marijuana tax was merely one of many taxes collected by the marijuana industry.
Brinks fought hard to win the required votes. She was successful at 4:00 am on Wednesday when she addressed members of Capitol’s press corps.
Brinks explained that “it was hard to integrate it with all the demands in the budget, and yet be responsible.” But they did. “I think there was a willingness to consider multiple ways to get enough revenue… This just happened to be the one that could get the votes. Politics is the art of the possible and, in this instance, it was that road that led us.
Michigan Advance was the first to publish this article.