IN­SIDE

The Bond Buyer - - Front Page - By Andrew Coen

New Jersey mu­nic­i­pal­i­ties should be “full part­ners in rev­enue gained from cannabis sales,” said Ne­wark Mayor Ras Baraka.

As New Jersey con­sid­ers le­gal­iz­ing recre­ational mar­i­juana, some of its cities are fight­ing for a piece of the rev­enue pie.

Three New Jersey may­ors penned a let­ter to state law­mak­ers re­quest­ing a home rule in any cannabis leg­is­la­tion that would en­able mu­nic­i­pal­i­ties to re­ceive a larger per­cent of gen­er­ated tax rev­enue.

The city lead­ers are also push­ing for a le­gal­iza­tion bill to in­clude mea­sures that would strengthen so­cial jus­tice is­sues re­lated to mar­i­juana such as ex­pung­ing past con­vic­tions and lift­ing jail sen­tences.

“It is not enough that we sim­ply le­gal­ize adult use of cannabis,” said Ne­wark Mayor Ras Baraka, who was among the may­ors to send the let­ter along with Jersey City Mayor Steve Fu­lop and Hobo­ken Mayor Ravi Bhalla. “We must make our mu­nic­i­pal­i­ties full part­ners in the rev­enue that will be gained from cannabis sales.”

Baraka said the may­ors of Tren­ton, Maple­wood, Bloom­field and Lin­den have also voiced strong sup­port for the let­ter, which re­quests a pro­vi­sion in any mar­i­juana le­gal­iza­tion mea­sure that would des­ig­nate 5% of state tax rev­enues gen­er­ated within a mu­nic­i­pal­ity to the lo­cal gov­ern­ment. The may­ors said the ex­tra rev­enue could be used for pro­grams re­lated to mar­i­juana en­force­ment, reg­u­la­tion, ed­u­ca­tion and aid­ing the es­tab­lish­ment of lo­cal cannabis busi­nesses.

“The pro­pos­als down in Tren­ton today pro­pose one per­cent for the host mu­nic­i­pal­ity, which re­ally doesn’t do any­thing,” Fu­lop said dur­ing a press con­fer­ence Thurs­day along­side Baraka and Bhalla. “When you look around the coun­try, you see num­bers closer to five per­cent.”

A 2016 re­port from New Jersey Pol­icy Per­spec­tive and New Jersey United for Mar­i­juana Re­form es­ti­mated that the state would reap an es­ti­mated $300 mil­lion an­nu­ally from le­gal­iz­ing cannabis. New Jersey Gov. Phil Mur­phy un­suc­cess­fully pushed law­mak­ers to le­gal­ize mar­i­juana early this year in hopes that the rev­enue could be used for the 2019 fis­cal year bud­get.

Ne­wark is on the verge of a credit up­grade three years af­ter slid­ing to near junk level. Moody’s In­vestors Ser­vice re­vised its out­look on Ne­wark’s Baa3 rat­ing to pos­i­tive from neg­a­tive in January cit­ing eco­nomic de­vel­op­ment projects that have fu­eled im­proved re­serves and liq­uid­ity in New Jersey’s most-pop­u­lous city.

Jersey City, New Jersey’s sec­ond most pop­u­lous city, is rated A2 by Moody’s. S&P Global Rat­ings af­firmed Hobo­ken’s AA-plus long-term bond rat­ing in Fe­bru­ary.

“I also stand here today to ask the state Leg­is­la­ture to give mu­nic­i­pal­i­ties author­ity to de­cide how many cannabis li­censes are ap­pro­pri­ate for their com­mu­ni­ties, to gain a fair share of tax rev­enue gen­er­ated by the sale and also use those rev­enues as in­vest­ments lo­cally,” Bhalla said at Thurs­day’s press con­fer­ence held in Ne­wark City Hall.

Mar­i­juana rev­enue from le­gal­iza­tion would help New Jersey con­front struc­tural bud­get chal­lenges that along with a large pen­sion bur­den have con­trib­uted to it hav­ing the sec­ond-low­est bond rat­ings among U.S. states.

New Jersey’s gen­eral obli­ga­tion bonds are rated A3 by Moody’s, A-mi­nus by S&P and A by Fitch Rat­ings and Kroll Bond Rat­ing Agency.

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