The Citizens Budget Commission, a budget watchdog, is warning that even if marijuana can clear the political hurdles for approval next year, pot tax revenue is a long way off.



"It is a good sign for New York, overall, that Illinois could approve legalization through their legislature and get their program running this fast," said Patrick Orecki, a senior research associate at the CBC. "But the fact is that this stuff takes time."



Legalizing marijuana is just the first step. Agreeing on how to license, sell and tax it is much more complicated. The CBC noted in a report this week that Illinois is the fastest state to launch a retail marijuana market, approving a law for recreational pot in June 2019 and getting it to stores by the start of 2020. It is more common, however, to see a timeline like that of Massachusetts, where recreational marijuana was voted into law via referendum in November 2016, but did not reach stores until July 2018.

"Experience in other states shows that it takes approximately three to four years to realize consistent tax revenues," said Patrick Orecki, author of the report and Senior Research Associate with the Citizens Budget Commission.

“Transit is the lifeblood of the city, the ease of getting to work and moving around helps the city’s dynamism and helps its growth. It makes it attractive,” said Andrew Rein, the president of the Citizens Budget Commission, a fiscal watchdog. “We need to see the details in order to determine whether the severity of these cuts will be so painful that they are a drag on the economy.”

The MTA wants $12 billion to a cover a falloff in fare and tax revenues caused by the pandemic.

It's looking to Washington for a bailout. But experts say the agency could erase some of the shortfall itself.

The Citizens Budget Commission’s report however says state leaders should be cautious about relying on those potential revenues to help close budget gaps.

According to the Citizens Budget Commission, California brought in about $764,000,000 from recreational marijuana revenues from July 2019 to June 2020.

The state’s top fiscal watchdog is in no hurry to cut services or raise taxes.

Comptroller Thomas DiNapoli acknowledged that some groups, including the Citizens Budget Commission, have urged the Cuomo administration to act sooner rather than later to address the current year $15 billion budget gap. But instead, he’s urging patience.

De Blasio struck a deal with Teamsters Local 831, the Uniformed Sanitationmen’s Association, to punt $27 million in payroll costs from the 2021 budget to 2022. It marks the latest in a string of $722 million in total cost-shifting arrangements negotiated with municipal unions, which City Hall has spun as “savings.”

“Paying bills late does not save you money,” said Andrew Rein, the head of good government group, the Citizens Budget Commission. “We’re just going to have the same problem we have today, but instead we’re going to have it tomorrow.”

“We’re not out of the woods by any stretch of the imagination,” Maria Doulis of the Citizens Budget Commission said in an interview. “It’s just the first quarter. I don’t want to get too excited. What happens if we go into a second lockdown?”

“A slightly positive revenue picture doesn’t provide a path for actively and aggressively managing expenses,” she added.

She has repeatedly called on the city to require agencies to cut their spending plans — something the mayor has generally shied away from throughout his seven-year tenure. Instead, he has grown the overall budget from $75 billion the year he took office to $88 billion this year.

“There needs to be greater restraint on expenses and there needs to be more done to get real recurring savings from labor instead of just payment deferrals,” Doulis said. “The payment deferrals are not savings.”

The Citizens Budget Commission has a new report out about potential revenues that could come from recreational marijuana if it’s legalized in New York.

Governor Andrew Cuomo has voiced support for legalizing recreational marijuana use. Earlier this month, he called it the “right policy” and said “the state is going to be desperate for funding.” But a CBC report says “state leaders should be cautious about relying on these potential revenues to help close budget gaps.”

Patrick Orecki, who authored the report, says there are two main phases after legalization. The first is working out the regulatory structure.

“What we’ve seen is that that takes generally over a year to get from legalization to a functioning commercial market. Those times have been trimmed quite a bit, frankly, as more states have implemented and states can draw on what has happened around the country. So about one year is reasonable there,” Orecki said.

New York lawmakers should be cautious about overpromising tax revenue windfalls in the near term if the state legalizes and taxes cannabis because it can take years to realize consistent revenues, a New York policy group said Monday.

If New York legalizes recreational marijuana, lawmakers should not rely on those potential tax revenues to help close budget gaps, as it could take three to four years from legalization for the state to yield consistent receipts, according to a report released by Citizens Budget Commission.

"The state fiscal problems are very likely to outlast whatever federal aid package there is," said Dave Friedfel, an analyst with the Citizens Budget Commission, a fiscal watchdog group. "The numbers are so severe, I don’t see how they get through this without curtailing spending. And the tax proposals they are talking about aren’t enough to close the gap immediately."

Regardless of what happens in Washington, New York’s fiscal needs are now so great they can’t be entirely solved by federal action, said David Friedfel, director of state studies for the Citizen Budget Commission, a watchdog group.



“The state is going to have to do its own hard work to balance the state budget,” Friedfel said. He recommended that the state tap into its reserve funds, chop aid to the wealthiest school districts and financing infrastructure projects with debt rather than tax revenue.