The City should improve the transparency and accountability of its recreational cannabis tax revenue, according to an audit released May 2, 2019, by City Auditor Mary Hull Caballero.
Oregon voters legalized the possession and sale of recreational cannabis in November 2014, and in November 2016, Portland voters approved a 3 percent local sales tax. The ballot measure specified the tax revenue should be used in three categories, drug and alcohol programs, public safety, and support for small businesses.
The categories are intentionally broad, to meet changing community needs. The tax was promoted as funds that would benefit and support individuals and cannabis businesses owners that were adversely impacted when cannabis was illegal. Council established expectations that community members would be involved in allocation decisions, and there would be a link between the source and use of the tax.
Since that time, most of the taxes collected have been used for police and transportation programs. While the uses are allowed under the ballot measure, community members, cannabis businesses, or others impacted by past cannabis policies have not been involved in the budget decisions, and the City has not reported on how it’s used the tax revenues.
The audit recommends the City improve the transparency of tax allocation decisions and results and ensure an effective distribution of cannabis grants. Response from Commissioner Eudaly and the Office of Community & Civic Life is included in the report.
--Performance Auditor II Alexandra Fercak