How we voted, costs of business

On Tuesday, May 5, we Brookline voters approved a major tax override, mainly to support our public schools, and we also approved a major school renovation and expansion project. Some had thought higher or lower voter turnout might mean better or worse chances for the override, but the results did not shape up that way.

HowWeVoted2015

How we voted
When the percentages who voted Yes are charted against voter turnouts, by precincts, there are no clear patterns. Statistical regression finds standard probabilities of 70 percent or more association by chance–insignificant patterns by usual standards. However, when the percentages who voted Yes for the Devotion School project are charted against the percentages who voted Yes for the tax override, a strong pattern appears. Statistical regression finds standard probability of less than 0.01 percent association by chance–highly significant.

The results show no linkages between voter turnouts and votes on the ballot questions. Strong linkage between the results from the two questions tends to indicate issue-oriented voting: specifically, voters favoring funding for public schools through property taxes–or not. Overall, at least 60 percent of Brookline voters appear to favor funding schools, even when facing the third-highest override to be approved in Massachusetts during our 34 years with Proposition 2-1/2 limits.

The chart comparing results for the two questions also shows precincts falling into three clusters. Four of them–Precincts 2, 6, 8 and 9–appear at the high end of support for school funding. One of them, Precinct 15, shows a much lower level of support. The other precincts are in a middle group, supporting the tax override by about 60 percent and the Devotion School project by about 80 percent. Precincts 2, 8 and 9 are North Brookline neighborhoods, essentially the Devotion School district. Precinct 6 is well south of Beacon St., clustered around the High School.

Costs of business: marijuana dispensaries
Marijuana dispensaries that mean to make money and stay in business will need to divide their enterprises, as New England Treatment Access (NETA) plans, between retail and production. Jack Healy recently wrote in the New York Times that federal tax laws treat marijuana production and wholesale as ordinary businesses, factoring expenses against revenue. Marijuana retailers are treated like burglars, who cannot legally deduct the costs of getaway cars against the fruits of theft, on federal tax filings.

While burglars probably rarely report undercover incomes and expenses, registered medical marijuana dispensaries are more likely to want to behave like good citizens. They need coping strategies. An obvious one–not reported by Mr. Healy–is to load expenses and incomes onto production and wholesale and to minimize retail operations for tax purposes. That might be possible for a vertically integrated business like NETA, when it might not be for a thinly capitalized retail shop.

At a public meeting in Brookline, NETA representatives said that over three-quarters of their costs of business are expected to be in production. That suggests they have already given the tax situation careful study and might be back-loading their business model. It is not against the law to organize financial affairs so as to reduce taxes. Their local transactions might, for example, be divided into fairly low prices and fairly high fees–routed to the production business. In such a way, high costs NETA claims for production might be offset by high revenues passing from consumer to manufacturer.

– Craig Bolon, Brookline, MA, May 10, 2015


Ballot question results, Brookline town election, 2015

Town elections: tax override for schools passes, Brookline Beacon, May 5, 2015

Zoning Board of Appeals: zoning permit for a registered marijuana dispensary, Brookline Beacon, April 25, 2015

Licensing Review Committee: registered marijuana dispensary, Brookline Beacon, January 29, 2015

Jack Healy, Legal marijuana faces another federal hurdle: taxes, New York Times, May 10, 2015

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