LRC Justifies Fiscal Impact Statements with Methodology and Sources

On Tuesday I reported that the Legislative Research Council’s official fiscal impact statements on the four marijuana-related initiatives currently circulating showed far more costs for convictions under the proposed alcohol and tobacco bans than they showed in savings for the marijuana decriminalization initiative. The LRC failed to offer any specific cost figures on the medical marijuana initiative, saying that an increase in marijuana use would increase convictions and incarcerations that would offset any decrease in convictions of current medical marijuana users. I suggested that those fiscal analyses hinted at a bias against the pro-pot movement.

LRC director Jason Hancock provided me with some further details of the LRC’s analyses of these four ballot measures to affirm that what looks like bias is just the LRC’s best effort to present the facts.

First, let’s deal with the decriminalization, alcohol, and tobacco initiatives. Studying the fiscal impacts of the decriminalization measure, the LRC had to consider that the proposal changes possession of one ounce or less of marijuana from a Class 1 misdemeanor (max penalty $2,000 and one year in jail) to a mere civil offense (max penalty $100 and forfeiture of the dope). The LRC finds that 75% of current misdemeanor convictions for possession of marijuana involve an ounce or less. The average jail time for those convictions is 3.62 days. With jail time costing $72.30 per day, the estimated 1,212 ounce-or-less convictions thus cost the state $317,000. The decriminalization measure would save another $394,000 in jail costs by eliminating 1,311 convictions and 5,454 days of jail time for ingestion of marijuana. The decriminalization of pot paraphernalia saves only another $20,200 by eliminating 651 convictions and 280 jail days. Net savings: $732,000 (with some rounding error).

The alcohol and tobacco bans produce much lower estimates of convictions because, by the LRC’s read, the bans would be “nearly impossible” to enforce. The two initiatives ban the transfer but not the possession of alcohol and tobacco: the state would have to prove that Al Capone, Jr., (a) intended to sell the cartons and six-packs in his trunk and (b) acquired those treats illegally in South Dakota and not legally out of state or on the reservation (the bans don’t apply on Pine Ridge and other sovereign Indian territory!).

According to the LRC, only 0.18% of marijuana users are convicted for distributing pot. The LRC applies that percentage to tobacco users—23% of the adult population, 147,000 tobacco users, just 264 distributors—and to alcohol users—59% of the adult population, 381,000 alcohol users, 685 distributors. Not all of them would draw jail time, but the alcohol and tobacco bans would impose numerous felony convictions, which mean far longer jail and prison time than the marijuana decriminalization measure eliminates. Prison only costs $55 per day compared to $72.30 pre day for jail. The LRC’s estimates thus produce these costs for increased incarceration:

Alcohol	one-year prison	180 days prison	90 days jail
Convictions	131	81	205
cost per day	$55.00	$55.00	$72.30
Annual cost	$2,630,000	$802,000	$1,330,000
Total:			$4,770,000
Tobacco	one-year prison	180 days prison	90 days jail
Convictions	51	31	79
cost per day	$55.00	$55.00	$72.30
Annual cost	$1,023,825	$306,900	$514,000
Total:			$1,840,000

The misdemeanor nature of the pot convictions erased by decriminalization and the felony nature of the alcohol and tobacco convictions created by the new bans explain the disparity in the savings of the former measure and the costs of the latter.

Turning to the medical marijuana measure, the LRC’s report still does not offer actual dollar figures. But it does estimate that “roughly 16% of the state’s current marijuana users would qualify to use, sell, or transfer medical marijuana pursuant to the terms of this measure.” However, the LRC points to a 2015 Emory University study that says (LRC’s words) “states that have enacted medical marijuana laws have seen a subsequent 14 percent average increase in overall marijuana usage by adults, and an 18 percent increase in adult marijuana abuse/dependence.” (The Emory study also found implementation of medical marijuana laws associated with a 10% increase in binge drinking among adults.) The LRC thus concludes that the decrease in incarceration of current users would be mostly offset by the increase in incarceration of new recreational users.

Those are the numbers behind the fiscal impact statements for the marijuana-related ballot measures, straight from the LRC. Their explanation of their methodology and their sources establishes that, as we would expect, the Legislative Research Council has provided a fair assessment of the savings and costs these four measures may create within our corrections system.