Study: Marijuana Legalization Would Benefit Illinois Taxpayers, Economy

The study was conducted by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois.

November 9, 2018

La Grange - PRESS RELEASE: In the wake of Michigan becoming the tenth U.S. state to legalize marijuana on Tuesday, new research finds that the taxation and regulation of marijuana in Illinois could create nearly 24,000 new jobs, boost the state’s economy by $1 billion per year, generate over $500 million in new state and local tax revenue, and reduce annual law enforcement expenditures. The study was conducted by the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois.

Since 2014, Illinois has decriminalized possession of small amounts of marijuana and enacted a pilot medicinal cannabis program, but recent polling has found that two-thirds of Illinois voters–including majorities of both Republicans and Democrats–would support the taxation and regulation of recreational marijuana.

“Though decriminalization has already dramatically reduced law enforcement costs, police and courts still spend millions of dollars each year prosecuting marijuana offenses and hundreds of people remain incarcerated at a cost of more than $22,000 each year per inmate,” said study co-author Jill Manzo.  “By ending these prohibitions, Illinois taxpayers could save $18.4 million per year.”

This joint ILEPI and PMCR study used industry-standard IMPLAN modeling to assess potential financial impacts of the policy change on Illinois, as well as state law enforcement costs and post-legalization consumption and tax revenue Colorado—the first U.S. state to tax and regulate marijuana for recreational purposes.

“Assuming similar usage and taxation rates as Colorado, we’d expect marijuana legalization to have more than twice the financial impact in Illinois because of our state’s comparatively larger size,” said study co-author and ILEPI Policy Director Frank Manzo IV.  “At a practical level, this means tens of thousands of new jobs and hundreds of millions of dollars in new tax revenues that can be invested in vital infrastructure, education, and public safety programs that have been most impacted by recent budget pressures in Springfield.”

While outlining the benefits of taxing and regulating marijuana and proposing five key public priorities that could be targeted for investment under a new tax and regulation policy, researchers also assessed frequent claims made by opponents of legalization.

Specifically, the study noted that in other states that have taxed and regulated recreational cannabis, usage rates failed to rise, opioid use dropped by as much as 33 percent, traffic fatalities shrank by as much as 11 percent, and there was no effect on occupational accidents or rates of employee absenteeism.

“The claims of legalization opponents have been studied exhaustively in states that have begun to tax and regulate legal marijuana,” said study co-author and University of Illinois Professor Robert Bruno. “While these policies have consistently brought a myriad of benefits to taxpayers and the economy, the research has failed to find any correlation between legalization and increased usage or other social costs.”

After voters approved measures in Michigan, Missouri, and Utah this week, a total of 33 U.S. states and the District of Columbia have now legalized marijuana either for medicinal or recreational purposes.