Projection: $529K for Nev. tax on marijuana

Nevada tax officials say the state will have to spend money before it can make money from a new tax on the sale of medical marijuana.

The Nevada Department of Taxation has requested $529,000 from a special legislative fund to cover the cost of collecting the dispensary excise tax that Gov. Brian Sandoval signed into law this year. The tax goes into effect next year.

The state Board of Examiners, chaired by the Republican governor, is scheduled to consider the funding request Tuesday in Carson City before it’s forwarded to the Legislature’s Interim Finance Committee on Aug. 29.

State officials have no estimate on the overall fiscal impact, but advocates of the new system say the tax could raise up to $30 million a year.

Nevada voters approved medical pot more than a decade ago, but the only legal way to get the drug has been for cardholders to grow it themselves.

The 2013 law that permits the dispensing of medical marijuana includes a provision that a 2 percent excise tax be imposed both on wholesale and retail sales.

The tax was added to the bill late in the session, and no money was included for the tax department to set up a process to collect it.

Sen. Tick Segerblom, D-Las Vegas, a key sponsor of the medical marijuana bill, said $529,000 seems “incredibly high” given that it will be sometime in mid-2014 before the sales start.

Segerblom noted the department initially told the governor the collections would cost $2 million.

The Board of Examiners also will consider a request from the Southern Nevada Adult Mental Health Services for $3 million from the same contingency fund to help pay for expansion of the Stein Hospital in Las Vegas to alleviate problems at Rawson-Neal Psychiatric Hospital.

The fund has an estimated $12 million available.

The Rawson-Neal hospital in Las Vegas has been criticized for its handling of mentally ill patients and not having enough beds to care for those with mental problems.

The Legislature set aside $2 million for expansion of 19 beds at Stein Mental Hospital. The state Department of Health and Human Services has proposed asking for an additional $3 million for more beds.

The department wanted to take the money from life-safety projects planned for Lake’s Crossing, the hospital in Sparks for mentally ill patients facing criminal charges.

The legislative committee rejected cancelling the Northern Nevada projects and told state officials to come back with another solution, including possibly dipping into the emergency contingency fund. The finance committee did approve spending $2.1 million to hire more staffers and for additional beds at Rawson-Neal.