July 23, 2015

By LISA LEFF 

Associated Press 

A blue-ribbon panel says curtailing the illegal marijuana market in California should be the primary goal of legalizing the drug's recreational use in the state, and not developing another tax source.

In a 93-page report released Wednesday, the panel chaired by Lt. Gov. Gavin Newsom presents a wide range of choices and competing interests involved as advocates work to bring a recreational use initiative to voters next year.

Chief among the issues will be to determine how to structure licenses that growers and others in the industry will need. The panel indicated it wants that done in a way that both allows existing small suppliers to participate as well as leading to legitimate jobs without creating an unwieldy system.

The group said it was also important to develop a regulatory system that doesn't make it easier for children to obtain the drug and doesn't encourage exports by producing more pot than Californians use.

The country's most populous state already has a well-established medical marijuana industry as well as a thriving black market with ties to Mexico.

"This industry should not be California's next Gold Rush," the report states.

The Blue Ribbon Commission on Marijuana Policy was convened by Newsom with the American Civil Liberties Union of Northern California. The work of the 24-member panel, which includes law enforcement representatives, tax experts, legal scholars, addiction doctors and a former White House drug policy advisor, is expected to influence several groups of marijuana activists and entrepreneurs that are trying to qualify a November 2016 ballot proposal that would legalize marijuana use for adults 21 and older.

Newsom, a declared Democratic candidate for governor in the 2018 race who supports legalization, said in an interview Tuesday that presenting the report as a series of options rather than detailed recommendations reflected both the difficulty of getting the group to agree on some of the thornier issues and the consensus that any law put before voters would ideally allow future fine-tuning.

"Perhaps the most important message from the report is what we are not recommending. We are not recommending maximizing the amount of tax revenue, we are not recommending that we promote and create a large industry, and we are not promoting and recommending that the price of marijuana drop significantly," he said. "And the reason is all of those goals would depend on and encourage heavy use."

Setting the right sales tax rate for different segments of the industry was a subject the commission singled out as integral to the overall objective of minimizing illegal activity.

If pot were taxed too highly, it would encourage sellers to stay in the illicit market, while taxes that were too low could spark a price drop that would make it easier for minors to score, said Stanford University psychiatry professor Keith Humphreys, a former adviser to the White House Office of National Drug Control.

"High prices, which you can induce by putting a minimum price on or setting high taxes, are good for deterring use, especially by kids, but if they are too high the illicit market can still continue," Humphreys said. "So that's a balancing act and that's why one of the other things we emphasize is the importance of some flexibility in the process."

At the same time, the commissioners agreed that money raised from licensing fees, taxes and fines should be funneled back into drug education programs, treatment programs for youth and policing over unlicensed growers who divert water from streams and foul public lands.

"The only regulatory tool we have over the illicit market now is to arrest people and put them in jail," said Abdi Soltani, the ACLU's executive director in Northern California. "When you switch to a legal market, you can test the product for safety, you can inspect the farms for their water use, and you can make sure the workers are paid a wage and not abused."

July 16, 2015

Special to the NNPA from The Washington Informer 

Minority-owned banks are crying foul about the federal government snubbing them for tax credits they say could generate economic development in the nation’s most needy communities.

The Community Development Financial Institutions (CDFI) Fund, an arm of the Treasury Department, issued in June $3.5 billion in New Markets Tax Credit (NMTC) allocation to 76 entities across the country to spur economic development.

However, none were awarded to the nation’s minority banks, despite those institutions claiming the longest track records of deploying capital in the nation’s most underserved areas.

“The NMTC program has great potential to be part of a comprehensive economic solution in America’s inner cities, most of which still have not recovered from the Great Recession,” said Preston Pinkett, CEO of City National Bank and chairman of the bankers association. “But the groups best equipped to make those investments, minority banks — many of which have been in service for over 100 years — have largely been shut out of the NMTC program. We need our CDFI Fund to do more; we need a real change that will allow us to receive allocations so we can use these resources to improve our communities.”

The federal tax-credit program provides a tax credit to investors who invest in projects or small businesses in those communities by funneling their investments through the recipients of tax credit allocation.

According to the CDFI Fund’s Award Book, only six awards — less than 8 percent — went to minority-controlled entities of any kind, and those groups received only $165 million, under 5 percent of the total dollar amount of allocation.

“The absence of a single minority bank raises much concern,” said Michael Grant, president of the National Bankers Association. “In 2009, the General Accounting Office issued a report detailing the disparity in NMTC awards to minority entities. The numbers have actually gotten worse, not better.”

A 2009 study by the Government Accountability Office indicated that only about 9 percent of minority entities were successful when applying for NMTCs, while non-minority entities had three times the success rate, winning 27 percent of the time. According to GAO, although the program is highly competitive, minority entities have less than a one in three chance of any other type of entity to receive an award.1 Minority banks have had even lower success rates than minority entities overall.

“By our estimates, less than 2 percent of the $450 billion in NMTCs issued over the past 12 years has gone to minority banks,” said Doyle Mitchell, CEO of Industrial Bank of Washington, D.C. and former chairman of the bankers association. “Some of our banks have been deploying capital in the poorest neighborhoods in America for over 100 years, and we think the CDFI Fund should review the program to ensure that applications by minority and other small CDFI banks are evaluated on criteria that reflects their position as regulated institutions operating in distressed areas, which is significantly different from non-regulated or larger institution applicants.”

Alden McDonald, CEO of Liberty Bank in New Orleans, said the imbalance would be even more pronounced had it not been for funds his bank received after Hurricane Katrina.

July 09, 2015

City News Service 

Los Angeles water and power users would see their rates increase 2.4 percent to 5.4 percent annually for five years under a proposal unveiled by Department of Water and Power officials on Wednesday. The plan was presented to the Los Angeles Board of Water and Power Commissioners, with officials saying the rate increases are needed to replace aging infrastructure, further water and energy conservation goals and improve customer service. DWP officials estimated that the typical residential water and power customer would face a 3.4 percent increase, which translates to paying an additional $4.75 a month, under the proposed hikes.

But customers could see increases of as little as 2.4 percent, a roughly $1.95 per month hike, or as high as 5.4 percent, which is about $17.64 per month, depending on usage. DWP officials tried to make the case for the rate hikes, saying they have worked to save $467 million through reductions in labor and other costs. In order to keep up with rising power and water costs over the next five years, DWP would need to bring in an additional $900 million for its power service, and $230 million for its water service, officials said.

Commission President Mel Levine said this is just the start of conversations about the rates, and there will be outreach efforts over the next several months.

“I anticipate this will indeed be a dialogue involving both informing customers and most importantly listening to feedback from these important stakeholders and from the community,” he said.

The discussion will also involve the City Council and Mayor Eric Garcetti, the ultimate decision-makers in whether the rate hikes are adopted, Levine said.