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California News

What Measure A Could Mean for the Local Cannabis Industry and Funding for Children’s Programs

Measure A will be the only local issue on the Nov. 2 ballot

Measure A on the Nov. 2 ballot seeks to increase the percentage of cannabis revenues allocated to the Children’s Fund from 12.5% to 20%. PHOTO: Tarmo Hannula

On the Nov. 2 ballot, there will only be one local issue for Santa Cruz voters to weigh in on: whether to increase the portion of funds generated from the city’s cannabis tax going to children’s programs.

Measure A would increase funds going to children’s programs from 12.5% to 20% and establish a dedicated Children’s Fund to collect and allocate the money. The rest of the money collected from the cannabis tax goes to the city of Santa Cruz’s general fund.

The measure is going out to voters at a time when the City is projecting the pandemic-related recession and budget crisis will last for at least the next four years. Bringing this measure to the voters is estimated to cost the city between $141,804 to $177,255, based on figures from the County Elections Department.

Councilmember Martine Watkins, who proposed the measure alongside Shebreh Kalantari-Johnson and Renee Golder in June, said Measure A was not supposed to be the lone measure on the ballot. A half-cent sales tax increase that would have brought an estimated $6 million annually into the city’s general fund was also planned for the ballot, but that measure, which required unanimous approval from the council, was struck down by Councilmember Sandy Brown. Brown, the lone holdout, cited the city’s inability to increase its lowest-paid employees’ wages as one of her primary reasons for blocking the measure.

While Watkins wished voters would have had the chance to vote on both measures, she still believes the expenses associated with bringing Measure A to voters are justified.

“It’s really an incredible investment and in the immediate term when you think about the childcare crunch and the essential workers needing childcare during the pandemic,” Watkins says. “We talk a lot about equity, and now we have a chance to take action.” 

If voters affirm the measure, she says, it would make the fund permanent, rather than beholden to whoever sits on the council.

“We have been seeing a lot of turnover on the council,” says Watkins. “This is my last term on council, and policies over time can lose intention.”

How It Started 

Watkins first thought of the idea of having a dedicated children’s fund after California legalized recreational cannabis in 2016. She was excited about the city’s new source of revenue, and went to work advocating for a portion of those funds to go to underserved youth. The council created the Children’s Fund in 2017, and since then it has distributed $83,634 to children’s programs in Santa Cruz. The money has gone to programs like the Neighborhood Childcare Center and the Toddler Care Center, specifically dedicated to making sure these services are accessible to low-income families. 

If Measure A is approved, the Children’s Fund will see a much larger chunk of the $1.7 million in cannabis tax revenues the city projects for 2022. 

Watkins says that since the cannabis industry is growing, more money going to children’s services doesn’t necessarily mean that the city’s general fund will take a hit.

“The increase wouldn’t be taking away from something, since the cannabis industry is a new revenue source that just continues to grow,” says Watkins.

It’s true that cannabis tax revenues have been on a steady incline since 2016, often exceeding the city’s projections. In 2021, it has exceeded projections by over half a million dollars, according to the balance sheet for the cannabis business tax fund sent to GT by city spokeswoman Elizabeth Smith.

While Watkins acknowledged that the cannabis industry is bound to plateau, she says the investment in childcare will be lucrative in more ways than one.

“When we think about how a lot of our dollars are spent dealing with really complex social issues before us, this is just the longer-term investment to set kids up for success,” she says. “And hopefully, they will be successful contributing members of our community, which can really pay off in the long term in terms of our costs associated with the police or fire department.”

In addition to increasing money that is allocated to the children’s fund, Measure A would set up a Community Oversight Committee. Who will sit on this committee will be critical to the success of distributing the money to the kids who truly need it, says Councilmember Justin Cummings.  

“I think that the makeup of that committee needs to be diverse, racially and socioeconomically,” Cummings says. “And with regards to gender as well, because we need to make sure that those funds are going to the families that need it the most.”

It’s not pre-determined exactly how these dollars will be used, but it’s expected that funds will be distributed similarly to how they are now, with 50% of the funds going to childcare, and the remaining 50% providing scholarships for kids to participate in parks and recreation programs.

Status of Childcare

Federal funding is slated to come from President Joe Biden’s American Families Plan, which promises to lower child care expenses based on income, and would cover care costs for children from the lowest income brackets. In total, the plan would spend $200 billion on universal Pre-K and inject $225 billion into child care. But the infrastructure required to get that money out to states and local governments could mean it will take years for programs to see that money. 

While Biden’s plan is a step in the right direction, it still might not be enough, says David Brody, executive director of First 5 Santa Cruz County. 

“What we know from our work at the national, state, local level is that the cost of providing really high-quality care often exceeds federal and state subsidies that are available to do that,” he says.

And, Brody says, the pandemic has only exposed how critical accessible childcare really is. 

“We need everyone to step up to get us to the place that we want to be as a community in terms of a truly well-supported system of care for young children and families,” Brody says. “Local measures like the Children’s Fund, in our view, are absolutely essential.”

Ballots were mailed to Santa Cruz registered voters on Oct. 4. To vote, visit Santa Cruz County Clerk/Elections Office 9am to 5pm on Oct. 30-31. On Election Day, Nov. 2, polls open at 7am and close at 8pm. Visit the County Clerk’s website for more information.

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