When the city of Vista proposed a cannabis tax measure to voters in 2018, city officials were worried about the future of the city’s finances.
They were hoping the tax revenue could help the city manage rising costs, especially rising pension costs, which is the money the city must set aside to pay retired workers their promised retirement benefits.
But city leaders didn’t anticipate the tax would actually generate upwards of $7 million each year in tax revenue from cannabis businesses.
Initially, city officials didn’t make any promises on how they would allocate the money, but after finding themselves with excess cannabis revenue year after year, they decided to use some of the money to fund special projects and services including a scholarship program, a safe parking lot and public safety measures.
The First in North County
Vista was the first city in North County to allow storefront medical marijuana sales thanks to a citizen’s initiative that was also on the ballot in 2018, the same year as the cannabis tax measure.
The citizen’s initiative, called Measure Z, authorized retail medical marijuana sales at up to 11 shops in the city, along with a 7 percent tax on all gross sales. An organization called Vistans for Safe Community Access put it on the ballot.
The then-City Council also put two other cannabis measures on the November 2018 ballot: Measure BB, which would have allowed delivery-only medical marijuana sales, and Measure AA, which imposed a tax on all potential future cannabis businesses, including medical and recreational marijuana sales.
Voters approved Measure Z and Measure AA, but because Measure Z passed by a slightly higher percentage, it set the tax rate for medical marijuana at 7 percent. Measure AA allowed the city to set the tax rate for recreational marijuana, also at 7 percent, once city officials began allowing adult recreational cannabis sales in 2021.
At the time that city officials put Measure AA on the ballot, some city leaders were doubtful of how much revenue it would generate, and if it would be significant enough to help the city get its budget back on track, Vista Councilmember Corinna Contreras told Voice of San Diego.
The plan was to put that money into the general fund, which pays for the city’s basic services and expenses. But revenue from the cannabis tax turned out to be upwards of $7 million each year, according to city staff reports.
“We went from a potential budget deficit outlook to having excess in the millions of revenue for our city,” Contreras said. “When your budget is – at that time, let’s just say like $95 million or $100 million or so – $7 million ends up being an extraordinary amount.”
Then, in 2021, city leaders decided to cap cannabis tax revenues for the general fund at $4 million each year, and any revenue beyond that would go toward funding special projects.
Contreras called the decision a game changer for the city.
“It’s critical that these benefits don’t just get stuck in a bureaucracy,” Contreras said. “Our residents should be able to see their tax money working for them to better their everyday lives.”
Youth Scholarship & Education Programs
One of the most successful city initiatives that came out of this decision to fund special projects with cannabis tax revenues is the youth sports scholarship program, which helps students and youth participate in sports, arts, camps, summer programs and other extra-curricular activities.
Vista residents under 25 years old can apply for a scholarship of up to $1,000 per year to help pay for things like registration fees and supplies for teams or activities they want to participate in.
Since deciding to fund special projects in 2021, the city has allocated more than $1.5 million into the program, according to yearly spending reports.
Between July 1, 2023, and June 30, 2024, the city provided a total of $773,412 in scholarships to 2,200 youth, according to a city staff report.
The program has become so popular that the city had to hire someone to help run the program. And just last week, the City Council decided to reallocate unused money from the excess cannabis tax revenue to fund more scholarships due to high demand.
The City Council will consider incorporating academic scholarships into the program at a future council meeting.
The city has also used cannabis tax revenues to put about $500,000 into youth cannabis and substance abuse prevention programs.
Public Safety & Public Works
Excess cannabis revenue has also helped fund several public safety and public works initiatives in Vista.
Since 2021, the city has spent about $1 million on safety measures like increased street lighting, bike helmet distributions, gun locks for residents and cannabis decoy and enforcement operations, records show.
Each year, the tax revenue also funds a Sheriff’s deputy and two park rangers, which comes out to about $435,000 per year.
On the public works front, the city has spent more than $1.3 million since 2021 on park restroom maintenance, playground resurfacing and other park improvements.
Safe Parking Program
In 2023, Vista approved a safe parking program that allows homeless people and families to safely stay in their vehicles overnight. It was the first of its kind in the city and one of only two safe parking lots in North County. The other is in Encinitas.
City leaders have used about 1.25 million in excess cannabis tax funds to pay for the program.
Between Oct. 1, 2023, and March 31, 2024, the program served a total of 56 households. Of those families, 23 had positive exits, meaning they went on to a shelter or permanent housing, according to a city staff report.
The city contracted with nonprofit Jewish Family Service to operate the program, which also provides participants with bathrooms, handwashing stations, hygiene supplies and food. Participants can also meet with case managers to connect them with stable housing options, and security guards are present through all hours of operation.
Vista has 170 unsheltered homeless people, according to this year’s point-in-time count. That’s a 93.2 percent increase from 2023, when Vista had 88 unsheltered homeless people. However, the numbers are likely to be higher, as unsheltered homeless people living in their vehicles are much harder to see and count.
The City Council will decide how to allocate excess cannabis revenue for the next fiscal year at a council meeting this November.
Taxes that create programs and infrastructure improvements to help the citizens, instead of lining the pockets of the politician’s campaign contributors? In California? Wow!