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COVID could be driving up sales of 'vice' products, making them an unreliable source of funding

Oregon City Manager Tony Konkol said this week he was "leery to be excited" about the city's funding stream from marijuana sales dramatically increasing this year.

Tony KonkolOregon City has seen a steady increase in total marijuana-tax revenue, from $254,879 in 2017-18 to $496,917 in 2019-20.

"I do wonder a little bit if COVID has driven higher sales," Konkol said. "I would want to be cautious that we don't put all of our eggs into that basket."

City Commissioner Frank O'Donnell agreed at the Nov. 10 meeting that COVID was likely driving up sales of alcohol and marijuana, making taxes on such "vice" products an unreliable source of funding.

"There's an element of escapism going on right now, whether it's alcohol or some other," O'Donnell said.

Konkol said it's unknown how much the city's marijuana funding will be affected by statewide voters on Nov. 3 approving Measure 110, which decriminalized heroin/meth and called for the redistribution of some marijuana funds to drug treatment. Oregon City staff predict that Measure 110 will reduce the city's marijuana revenue annually by about $60,000, so they're trying to be conservative in their estimates.

"But the point is that we're going to see a little bit of a decrease in the revenues we're bringing in," Konkol said. "My ability to guess how many ounces are going to be sold and what the tax revenue is going to be is not very good, to be honest."

Oregon City Police Department Chief Jim Band said it's unknown how much the statewide vote will increase use of hard drugs, especially among young people. Band and elected officials share concerns about Measure 110 signaling to those considering the use of heroin/meth that these drugs are somehow OK.

Oregon City's marijuana revenues don't have to be directly used for city services to help prevent drug use, although that was a consideration in using marijuana taxes to fund the OCPD homeless liaison officer. Another $360,000 over the past two years went to deferred maintenance in parks, with the idea that children might enjoy parks together instead of turning to drugs.

City Commissioner Rocky Smith said OCPD officers and park construction should be funded out of normal property tax revenues.

"If we're talking positions or parks, that should be in our regular budget," Smith said.

Marijuana taxes could be used for OCPD's new mental health specialist position, partially funded through a federal Community Oriented Policing Services (COPS) grant for the next three years. In the fourth year, Oregon City's COPS position will cost approximately $150,000 per year.

Oregon City will have to finalize its 2020-21 budget by next June.

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