Did Marijuana Just Help Avert a Teacher Strike in Nevada?

Cannabis Blog Sep 6, 2019 Las Vegas, NV

As most of our readers know, Marijuana is big business in Nevada. Sales in fiscal year 2018 totaled $529 Million, and $639 Million in fiscal year 2019. From that, Nevada brought in over $100 Million in tax revenue in 2019 alone.

You may recall that Question 2, which brought recreational marijuana to Nevada, contemplated that this tax revenue that was going to fund K-12 education. While some of the money that was collected from marijuana taxes did go to fund education, it was only the excise tax at the wholesale level, which amounted to just $27.3 Million in 2018. The remainder of the taxes, particularly the 10% excise tax on retail sales (which was over $40 million in 2018), went to the state’s rainy day fund (essentially the state equivalent of an emergency fund).

Nevada’s 2019 legislature changed that with the passing of SB 545. As of July 1, 2019, all of the state retail excise tax will go to the distributive school account, which is then distributed to individual districts based on a complex formula related to the number of pupils in each district. Clark County School District (“CCSD”), one of the largest districts in the country with over 300,000 pupils, typically gets more than 60% of those funds. According to CCSD, 87% of that funding goes toward teacher salaries and benefits.

You’re probably wondering how this relates to a teacher strike. Well, if you’ve been reading the news, you likely heard that teachers in Clark County were set to strike if they didn’t receive a long-promised raise, which CCSD said it couldn’t afford. Suffice to say, the fight got really ugly around the end of August, with CCSD going so far as to seek an injunction against the teacher’s union. Coincidentally, this all happened shortly after the distributive school account was set to begin getting additional revenue from marijuana taxes. Ultimately the strike was averted when CCSD and the educators’ union reached a deal and the teachers got the raise they had been promised.

So did the increased marijuana revenue fund the raises? Not directly. The school’s budget was already set when the new revenue started coming in, so the new money isn’t what funded the raises. But does this provide some hope that the increased revenue may help our teachers in the future? Definitely.

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