Recreational marijuana revenue coming to city coffers

City also to receive $2.8 million in federal COVID-19 relief money

BURTON — The city will receive $140,000 this year from the state of Michigan, it’s portion of revenue from recreational marijuana facilities that have opened in Burton since it was legalized in 2018.

On March 4, the Michigan Department of Treasury began distributing more than $45.7 million collected from taxes and fees under the Michigan Regulation and Taxation of Marihuana Act (Initiated Law 1 of 2018).

Councilman Vaughn Smith said the city has $140,000 coming from five marijuana businesses in the city of Burton – a sum that is expected to become annual revenue for the city.

Smith asked the council, March 15, about how the money should be spent, adding he thinks it should go into upkeep for local streets.

“I’m looking from feedback from the council,” he said. “I talked to the mayor today about using that for local streets, that’s $140,000 annually. We haven’t put much money into local streets each year and right now we’re working on budget.”

Councilman Tom Martinbianco said he thinks using the money for local streets is a great idea, but he suggested that because the money is expected annually, the city would be best served to create a sinking fund on its local streets budget to put the money into.

“When we have enough money in there to take care of it, I think we could expense it out of that for a major project,” said Martinbianco.

Other council members agreed, with Councilwoman Tina Conley saying the money should go toward local streets or blight and Vice President Greg Fenner agreeing on streets.

President Steve Heffner said work on local streets in Burton is long overdue.

“Local streets have been neglected,” he said. “I have been on the council since 2007 and I can’t remember a time we’ve put any significant amount of dollars towards the repair of local streets. We’ve done major streets, we’ve done water lines, we’ve done sewer lines – it’s time that we focus a little bit on local streets.”

Heffner also said the city has to consider how it’s going to use its portion of money coming from Washington D.C. in the President Joe Biden’s recent $1.9 trillion COVID-19 relief package.

“That $2.8 million that’s coming into the city, that a lot of money,” said Hefner. “I think we need to hold a special council meeting… to discuss those dollars and where we think those dollars should go where they would best serve the residents. I think we should do that before budget time, so we know what we’re going to do with it.”

Heffner said he’s like to see the administration find out what’s allowable and what’s not allowable to use the federal money toward. The money is expected to come in two payments – half this year and half next year, and the city will have until 2024 to use it.

Martinbianco said the council should not “put the cart before the horse” and he said they should get guidance from the federal government before planning any use for the $2.8 million. He said the city needs to find out what kind of paperwork is required and what the additional cost for the city’s accounting audit will be.

Regarding the marijuana funds, 15 percent of the tax revenues collected by the state goes to municipalities in which a marijuana retail store or a marijuana microbusiness is located, allocated in proportion to the number of marijuana retail stores and marijuana microbusinesses within the municipality.

Counties receive another 15 percent, while 35 percent goes to the School Aid Fund to be used for K-12 education; and 35 percent to the Michigan Transportation Fund to be used for the repair and maintenance of roads and bridges.