6A - Thursday, September 20, 2012

The Michigan Daily - michigandaily.com

Pot sales could lead to
tax windfall for states

Ei Manana de Reynosa/AP
A Mexican army vehicle patrols on a road as fire and smoke rise from a gas pipeline distribution center in Reynosa, Mexico
near Mexico's border with the United States on Tuesday.
M "
Mexican pipeline fire kills
29 people, injures 46 more

Three states could
legalize marijuana
this fall
DENVER (AP) - A catchy
pro-marijuana jingle for Colora-
do voters considering legalizing
the drug goes like this: "Jobs for
our people. Money for schools.
Who could ask for more?"
It's a bit more complicated
than that in the three states -
Colorado, Oregon and Wash-
ington - that could become the
first to legalize marijuana this
fall.
The debate over how much
tax money recreational marijua-
na laws could produce is playing
an outsize role in the campaigns
for and against legalization -
and both sides concede they're
not really sure what would hap-
pen.
At one extreme, pro-pot
campaigners say it could prove
a windfall for cash-strapped
states with new taxes on pot and
reduced criminal justice costs.
At the other, state govern-
ment skeptics warn legalization
would lead to costly legal battles
and expensive new bureaucra-
cies to regulate marijuana.
In all three states asking vot-
ers to decide whether residents
can smoke pot, the proponents
promise big rewards, though
estimates of tax revenue vary
widely:
- Colorado's campaign touts
money for school construction.
Ads promote the measure with
the tag line, "Strict Regulation.
Fund Education." State analysts
project somewhere between $5
million and $22 million a year.
An economist whose study was
funded by a pro-pot group proj-
ects a $60 million boost by 2017.
- Washington's campaign
promises to devote more than
half of marijuana taxes to
substance-abuse prevention,
research, education and health
care. Washington state analysts
have produced the most gener-
ous estimate of how much tax
revenue legal pot could pro-
duce, at nearly $2 billion over
five years.

- Oregon's measure, known
as the Cannabis Tax Act, would
devote 90 percent of recreation-
al marijuana profits tothe state's
general fund. Oregon's fiscal
analysts haven't even guessed
at the total revenue, citing the
many uncertainties inherent in
a new marijuana market. They
have projected prison savings
between $1.4 million and $2.4
million a year if marijuana use
was legal without a doctor's rec-
ommendation.
"We all knowthere's a market
for marijuana, but right now the
profits are all going to drug car-
tels or underground," said Brian
Vicente, a lawyer working for
Colorado's Campaign To Regu-
late Marijuana Like Alcohol.
But there are numerous ques-
tions about the projections, and
since no state has legalized mar-
ijuana for anything but medical
purposes, the actual result is
anyone's guess.
Among the problems: No
one knows for certain how
many people are buying black-
market weed. No one knows
how demand would change if
marijuana were legal. No one
knows how much prices would
drop, or even what black-market
pot smokers are paying now,
though economists generally
use a national estimate of $225
an ounce based on self-reported
prices compiled online.
"It's difficult to size upa mar-
ket even if it's legal, certainly if
it's illegal," said Jeffrey Miron,
a Harvard University economist
who has studied the national
tax implications of the legaliza-
tion of several drugs.
In Colorado, the $60 million
figure comes from Christopher
Stiffler, an economist for the
nonpartisan Colorado Center
on Law & Policy. He looked at
the state's potential marijuana
market in a study funded by the
pro-legalization Drug Policy
Alliance. The figure comes from
a combination of state and local
taxes and projected savings to
law enforcement.
Marijuana smokers and deal-
ers, he argued, pay a premium
now because the drug is illegal,
and if government can find a
way to capture that excess, tax

collections should rise.
"You can basically take
advantage of economies of scale,
and the price of marijuana will
go down and government can
come in and capture the differ-
ence," Stiffler said.
The biggest unknown: Would
the federal government allow
marijuana markets to material-
ize?
When California voters con-
sidered marijuana legalization
in 2010, U.S. Attorney General
Eric Holder warned that the
federal government would not
look the other way and allow a
state marijuana market in defi-
ance of federal drug law. Holder
vowed a month before the elec-
tion to "vigorously enforce"
federal marijuana prohibition.
Voters rejected the measure.
Holder hasn't been as vocal
this year, but that could change.
In early September, nine former
heads of the U.S. Drug Enforce-
ment Administration called on
Holder to issue similar warn-
ings to Colorado, Oregon and
Washington.
That political uncertain-
ty could translate into states
spending thousands of dollars
to defend the laws, critics say.
"I think it's important that
this ballot lay out for the voters
how much litigation is going to
result from this," said Colora-
do assistant Attorney General
Michael Dougherty, a critic of
the legislation.
Legalization proponents
counter that some of the 17 med-
ical-marijuana states already
collect pot taxes in violation of
federal law, which does not con-
done medical use of the drug.
Colorado collects several mil-
lion dollars a year in pot-related
taxes, including sales taxes,
licensing fees and fees paid by
patients to acquire the drug.
Oregon last year doubled the
cost of a medical marijuana card
to raise money for things like
clean water and school health
programs.
"Marijuana can be regulated,
can be taxed, can be sold. We're
doing it now, just currently to
sick people," said Vicente, the
lawyer working on the Colorado
legalization campaign.

Fire controlled
before reaching gas
plant
REYNOSA, Mexico (AP) - The
death toll ina pipeline fire at a dis-
tributionplantnearthe U.S. border
has risen to 29, Mexico's state-
owned oil company said Wednes-
day.Atleast46others were injured,
and more might be missing.
Juan Jose Suarez, director of
the state-owned Petroleos Mexi-
canos company, told local media
earlier in the day that at least five
workers had not been seen since
the blast. On Tuesday, the com-
pany, known as Pemex, said in
its Twitter account that a total of
seven people were unaccounted
for.
President Felipe Calderon said
the quick reaction of emergency
teams prevented a "real catastro-
phe," by controlling the fire before
it reached the huge tanks of a

neighboring gas processing plant.
The enormous fire Tuesday hit a
distribution center near the border
with Texas that handles natural
gas coming in from wells and sends
it to a processing plant next door.
"The timely response by oil
workers, firefighters and the Mex-
ican army was able to control the
fire relatively quickly and avoid
a real catastrophe of bigger pro-
portions and greater damages if
the fire had spread to the center
for gas processing, which is right
there," Calderon said in a speech
in Mexico City.
The blast and ensuing fire left
charred tanks and a mound of tan-
gled steel at the walled plant near
the border city of Reynosa, across
from McAllen, Texas.
Two of the injured were report-
ed in serious condition.
Dr. Jaime Urbina Rivera, dep-
uty medical director of Hospital
Materno Infantil de Reynosa just
a few miles from the plant, said his
hospital had received nine injured
workers with first- and second-

degree burns covering 10 percent
to 40 percent of their bodies, with
the burns concentrated on their
backs and legs. They all arrived
conscious, he said.
Pemex officials said the blast
appeared to have been caused
by an accidental leak, and there
was no sign so far of sabotage.
The Mexican Attorney General's
Officeopened aninvestigationinto
the explosion Wednesday, sending
more than 20 investigators into
the site, which was blocked to the
press.
The facility's perimeter walls,
topped with razor wire as a secu-
rity measure in a country that has
seen thieves, saboteurs and drug
gangs target oil installations, pre-
sented an obstacle for plant work-
ers trying to flee.
Esteban Vazquez Huerta, 18,
who was inside the plant when
the fire erupted, managed to find
a gap in the wire, scale a wall and
escape. "We had to climb the wall
from that side because the fire, the
heat was reaching us,"



RELEASE DATE- Thursday, September 20, 2012
Los Angeles Times Daily Crossword Puzzle
Edited by Rich Norris and Joyce Nichols Lewis
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Arctic ice shrinks to
an all-time low level

Ice cap at North
Pole 18-precent
smaller than
previous record
WASHINGTON (AP) - In a
critical climate indicator show-
log an ever warming world,
the amount of ice in the Arctic
Ocean shrank to an all-time
low this year, obliterating old
records.
The ice cap at the North Pole
measured 1.32 million square
miles on Sunday. That's 18 per-
cent smaller than the previous
record of 1.61 million square
miles set in 2007, according
to the National Snow and Ice
Data Center in Boulder, Colo.
Records go back to 1979 based
on satellite tracking.
"On top of that, we're smash-
ing a record that smashed a
record," said data center scien-
tist Walt Meier. Sea ice shrank
in 2007 to levels 22 percent
below the previous record of
2005.
Ice in the Arctic melts in
summer and grows in winter,
and it started growing again
on Monday. In the 1980s, Meier
said, summer sea ice would
cover an area slightly smaller
than the Lower 48 states. Now
it is about half that.
Man-made global warming
has melted more sea ice and
made it thinner over the last
couple decades with it getting
much more extreme this year,
surprisingly so, said snow and

ice data center director Mark
Serreze.
"Recently the loss of summer
ice has accelerated and the six
lowest September ice extents
have all been in the past six
years," Serreze said. "I think
that's quite remarkable."
Serreze said except for one
strong storm that contributed
to the ice loss, this summer
melt was more from the steady
effects of day-to-day global
warming. But he and others say
the polar regions are where the
globe first sees the signs of cli-
mate change.
"Arctic sea ice is one of the
most sensitive of nature's ther-
mometers," said Jason Box,
an Ohio State University polar
researcher.
What happens in the Arctic
changes climate all over the
rest of the world, scientists have
reported in studies.
The ice in the Arctic "essen-
tially acts like an air conditioner
by keeping things cooler," Meier
said. And when sea ice melts
more, it's like the air conditioner
isn't running efficiently, he said.
Sea ice reflects more than 90
percent of the sun's heat off the
Earth, but when it is replaced
by the darker open ocean, more
than half of the heat is absorbed
into the water, Meier said.
Scientists at the snow and ice
data center said their computer
models show an Arctic that
would be essentially free of ice
in the summer by 2050,but they
add that current trends show ice
melting faster than the comput-
ers are predicting.

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LESSONS, D
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