If Arnold voters approve a November ballot measure to allow the city to charge a 3-cent sales tax on recreational marijuana purchases, the revenue generated from the tax will be used to pay off debt from the construction of the Arnold Recreation Center, Arnold officials have pledged.
Voters will be asked Thursday, Nov. 7, to approve the 3-cent sales tax for recreational marijuana purchased at any dispensaries that may open in the city.
“I think getting the rec center paid off will free up a lot of opportunities for the city,” Ward 1 Councilman EJ Fleischmann said during the Oct. 19 council meeting. “Once the rec center is paid off, this will be an ongoing tax that can be reallocated and used for several different opportunities across the city.”
The council voted unanimously Oct. 19 to pass the resolution pledging the potential revenue from marijuana sales to go toward the rec center debt, even though some members had some concerns about the legislation.
“In the (Oct. 12) work session, we talked about fixing roads, paying off the rec center early and some other things,” Ward 2 Councilman Bill Moritz said. “I don’t agree with this.”
Ward 3 Councilman Mark Hood said he supports the idea of paying off the rec center debt early, but he didn’t think dedicating the potential tax revenue from marijuana to one thing was right.
“I researched other municipalities that have earmarked money from this recreational marijuana tax, and I did not see one municipality that was doing 100 percent on anything,” he said. “They are doing things like mental health services and veteran services. Mental health is part of the reason why some people use marijuana. I think this is going to pass, and locking in with no flexibility is a concern for me.”
City documents show Arnold owes $7,133,650 in bond debt and interest payments for the rec center after the city refinanced some bonds in 2019. The rec center opened in 2005.
Under current revenue projections, with the marijuana tax, the rec center debt is scheduled to be paid off by August 2031.
The earliest Arnold is allowed to pay off the debit is August 2027, City Administrator Bryan Richison said.
Arnold Finance Director Bill Lehmann said if the city is able to pay off the debt by August 2027, the city would save about $329,800 in interest payments.
Ward 4 Councilman Gary Plunk said he was comfortable with dedicating possible marijuana tax revenue to paying off the rec center because the council still could change how the money is spent.
“We are not locked in,” he said. “If we get $100,000, we may allocate just $50,000 to pay off the rec center, and then we may allocate $50,000 to sidewalks or veterans. We can change this later.”
City Council members decided in August to place the marijuana sales tax measure on the November special election ballot.
Richison said the city will have to pay an estimated $34,630 to hold the special election.
The measure, called Proposition 1, will say, “Shall the city of Arnold impose a sales tax of three percent (3 percent) on the sale of adult use marijuana within the city of Arnold.”
Richison said the city has not sent out information about the measure like it did when Arnold residents were asked to vote on a 1-cent sales tax to help fund the Police Department in April.
“I have not heard anything pro or con,” he said of residents’ reaction to the sales tax measure question. “It has been very quiet along that issue.”
Missouri voters approved a measure in November 2022 allowing marijuana sales to people 21 and older. In February, facilities with licenses to sell medical marijuana began selling recreational marijuana as well.
As part of the measure Missouri voters approved in 2022, the state is charging an additional 6-cent sales tax on those purchases. Cities and counties may ask their voters to approve an additional 3 cents.
A Missouri Department of Revenue spokeswoman said Arnold’s current sales tax rate already would apply to the sale of adult use marijuana, which means if the 3 percent adult use marijuana sales tax passes, the tax rate would be the local rate, along with the 3 percent for sales of adult use marijuana only.
The total sales tax people pay in the city ranges from 9.35 cents per $1 to 11.35 cents per $1 depending on where they shop because some stores are in special taxing districts.
In addition to the 2.25-cent sales tax that goes to the city, the overall sales tax charged in the city includes 4.225 cents for the state, 1.625 cents for the county, 1/2 cent for the Rock Community Fire Protection District, 1/2 cent for Jefferson County 911 Dispatch and 1/4 cent for the Rock Township Ambulance District.
No marijuana dispensaries currently operate in Arnold. However, Planning Commission members approved a conditional-use permit for Good Day Farms to operate a dispensary at 2002-2008 Richardson Road across the street from a McDonald’s restaurant and Circle K gas station.
Richison said city officials have no estimate for how much revenue a sales tax on recreational marijuana may generate for Arnold.