Almost $100 Million In Missouri Marijuana Revenue Earmarked For Veterans And Other Programs Remains Unspent

*“The Missouri Constitution contains clear language for how these funds are
to be distributed.”*

*By Rebecca Rivas and Rudi Keller, Missouri Independent*

About $95 million in Missouri marijuana-tax revenue that voters set aside
for veterans services, public defenders and drug-addiction treatment
programs sat unspent at the end of the last fiscal year.

And budget projections show that unused pile of cash would still be more
than $60 million over the next two years unless lawmakers authorize the
intended beneficiaries to use it.

The unspent money was a key criticism of a report issued last month by
State Auditor Scott Fitzpatrick, who hammered state lawmakers and the
governor for allowing the funds from sales tax on marijuana to stagnate.

Under the Missouri Constitution, the money can’t be spent on anything other
than those three areas.

“Missouri voters passed both medical and adult-use marijuana programs with
the requirement that the proceeds of these programs would provide needed
resources for veterans, the public defender system and addiction programs,”
Fitzpatrick’s audit says. “In addition, the Missouri Constitution contains
clear language for how these funds are to be distributed. Ensuring these
programs have timely access to the funding legally dedicated to them is
necessary.”

Gov. Mike Kehoe’s (R) budget proposes transferring $131.7 million of
recreational marijuana money into the three beneficiaries’ funds. That’s
$40 million each for veterans and addiction treatment programs. The public
defender system would receive $51.7 million, to make up for funds that
lawmakers withheld last year.

But moving the money won’t address the problem if lawmakers don’t authorize
the three groups to spend it.

This will be the second year the public defenders system has struggled to
get lawmakers to approve what the office contends is much-needed pay raises
and social workers. The state agencies overseeing veterans and
drug-addiction treatment programs are having more success getting their
requests green lit this year.

Even if lawmakers and the governor approve the budget as it’s currently
proposed, there could be a combined $61.5 million sitting in those three
funds that beneficiaries still can’t touch.
*Long-awaited pay raises *

Last year, the public defender’s office wanted to use some of the cannabis
money to increase their attorneys’ starting pay from $65,000 per year to
$70,000. That would align the salary with the attorney general’s office
entry-level pay.

But the House shot it down.

Matthew Crowell, director of the Office of the State Public Defender, again
asked for raises for all employees during a budget hearing last month.

“Currently, we are dealing with about a 23 percent turnover rate, which has
significant impacts on our clients that we represent, the length of the
cases,” he told House Budget Committee members. “So we’re hoping that this
will help that problem. The No. 1 cited reason when our attorneys leave is
pay.”

For several years, the system suffered from long waiting lists, which
spurred a successful lawsuit that put pressure on the legislators to fund
more public defender positions in 2021.

Kehoe recommended $7.3 million for the pay raises, but Missouri House
Budget Committee Chairman Dirk Deaton cut that amount in half in his
recommendation for the marijuana money.

Crowell also asked to put a mitigation specialist, or a social worker that
connects clients with resources, in each district office, which would mean
35 new positions. He told House members that it’s “the greatest thing that
we’ve done as public defenders,” in his 18 years as a public defender.

Mitigation specialists help connect their clients with basic needs, he
said, so they don’t violate probation and go back to jail.

“We didn’t have that resource until now,” he said. “It’s made a world of
difference.”

However, the governor and Deaton have already recommended cutting that
request down to 20 new positions—a nearly $800,000 budget decrease. Aside
from helping clients, Crowell said these positions are much easier to fill
than new attorney openings established as part of the lawsuit, which the
office has never been able to fill.

Overall, his office is asking to use $25.6 million of the cannabis funds to
increase pay, add social work positions and improve technology. Even if
Crowell got everything his office asked for, there would still be more than
$33 million sitting in the state treasury fund that his office can’t touch
despite the fact that the money can’t be spent on anything else.

While Deaton cut the governor’s recommended funding for public defenders,
he went the opposite direction for drug-addiction treatment and education
programs.

Deaton has recommended spending $38.5 million on these programs, with $28.2
million going to the Missouri Department of Mental Health, $1.8 million for
corrections, $4.7 million for the Department of Social Services and $3.8
million to the health department.

However, Kehoe has recommended $5.5 million less than Deaton—yet both would
eliminate programs established in public schools and the state court system.

Several House members expressed concern about the move during a committee
hearing last month. Republican state Rep. John Black of Marshfield said
prevention and treatment for people with substance use disorders saves the
state money.

“One estimate is that $1 spent on these programs ultimately saves the state
$7 in terms of restoring people to productive society and preventing the
disaster that a [substance use disorder] is,” Black said during the hearing.

The proposals from the governor and House budget committee cut a $500,000
grant for drug and DWI courts to support programs focused on
medication-assisted treatment related to alcohol and opioid addiction. It
also eliminates $300,000 for drug abuse resistance education in schools.

If the governor recommendations are approved, $27.6 million of cannabis
funds available for these programs would be unspent.

The budget legislation would give the Missouri Veterans Commission the
green light to spend the entire $40 million on continued support of the
Veterans Homes Program, according to a commission spokeswoman.

That leaves no surplus in the veterans fund.
*‘Need for additional resources’*

When Missouri voters legalized adult-use marijuana in 2022, they approved
using revenue from sales tax and fees—after operating expenses—to be
divided evenly between three funds: for the state public defenders office,
the Missouri Veterans Commission and the drug treatment programs through
the Missouri Department of Health and Senior Services.

Budget officials estimate revenues will be $88.8 million in the upcoming
fiscal year from July 1 to June 30, 2027.

According to the audit released last month, staff in Fitzpatrick’s office
found the agencies “have communicated the need for additional resources,
but the full amount of the funds available have not been appropriated in
the approved budgets.”

Crowell said Deaton’s proposed 50 percent reduction in pay raises “will
severely limit our ability” to compete with other state agencies that pay
their attorneys more.

“Just for reference, the House just hired a new lawyer for around $74,000,
and the Senate hired a new lawyer for $80,000,” Crowell said, and both of
them were previously public defenders. “We cannot compete when these same
attorneys make only $62,000 at MSPD. Our proposal and the governor’s
recommendation would have allowed us to boost our starting pay to $75,000.”

A separate and ongoing concern, he said, is Deaton’s push to use the
marijuana money to reduce the public defender’s core budget, and this year
it’s by about $8 million.

Crowell believes voters didn’t intend for lawmakers to take away money
meant for the public defenders’ operations now that they have marijuana
revenue—pointing to the line in the constitution amendment that states all
revenue from the taxes and fees of recreational marijuana sales, “shall
provide new and additional funding…and shall not replace existing funding.”

Deaton’s argument is that the constitution refers to the public defender’s
budget at the time the amendment was passed in 2022, not the current amount.

“Obviously, we do not agree with this interpretation,” Crowell said. “If
tax revenue decreases, shifts or the constitution of Missouri is amended to
remove these provisions, [the Missouri State Public Defender System] will
be in a world of hurt.”

*This story was first published by Missouri Independent.*

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Veterans And Other Programs Remains Unspent appeared first on Marijuana
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