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Consent-General Government # 16.
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| Board of Supervisors |
Financial Services |
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| Subject |
| Adopt budget resolution adjusting the 2019-20 Department of Financial Services budget to enhance Cannabis Tax Collection efforts. (No general fund impact) (4/5 vote required) (Rinde) |
| Recommended Action |
| Adopt budget resolution adjusting the 2019-20 Department of Financial Services budget to enhance Cannabis Tax Collection efforts. |
| Strategic Plan Goal(s) |
| Operational Excellence |
| Reason for Recommended Action/Background |
Since July 1, 2018, the Department of Financial Services has been responsible for the collection of Cannabis Taxes approved by voters through Measure K. The department has continued to re-evaluate staffing in light of Cannabis tax collection efforts, and initially chose to use existing tax collection staff to perform this function. Tax information returns are submitted quarterly within 30 days of the end of the quarter by the licensed business and are initially self-reported data. As such, the Department desires to increase the analysis associated with the tax information submitted and compare against available information from the Cannabis Regulatory Program such as Track and Trace data, make additional information requests to licensees, and support the continued efforts of making the California Cannabis Authority (CCA) data platform functional.
As a result, the Department of Financial Services would like to assign a dedicated staff member to the Cannabis Tax Collection program for a six-month period to determine if enhanced efforts would yield higher tax collection as returns receive a higher degree of analysis and review. DFS then plans to re-evaluate longer term staffing toward the end of the 2019-20 fiscal year along with any changes to the program related to the Comprehensive Land Use Ordinance. The cost of dedicating a staff member to the program and back-filling the current role for this period is expected to be $35,000, while an additional $20,000 would be associated with various services and supplies including enhancing data systems related to the tracking of Cannabis licensees and tax data. These activities would be funded with cannabis regulatory fee revenue. |
| Collaborations (including Board advisory groups and external partner agencies) |
| The Department of Financial Services collaborated with the Cannabis Regulatory Program within Community Services and the Cannabis Working Group on this Board recommendation. |
| Competitive Bid Process |
| Not applicable. |
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