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Senate Leader Floats Marijuana Proposal As Pension Fix

Frankfort - Capitol - Capital
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Kentucky State Capitol

A state lawmaker said he will file a bill that would legalize the production, sale and consumption of marijuana for adults in Kentucky as an effort to get more tax revenue for the state’s ailing pension systems.

Sen. Dan Seum, a Republican from Louisville, said that lawmakers have been unwilling to seek out new sources of revenue so far but “desperation might change that.”

“We ought to be looking at creating new sources of revenue before we start looking at new taxes,” said Seum, who is the Senate Majority Caucus Chair.

“There would be a tremendous job opportunity in this.”

Seum said his proposal would create a licensing process for marijuana growers and retailers. He estimated the legislation would create about $100 million per year in tax revenue for the state.

Kentucky has one of the worst-funded pension systems in the nation with an estimated unfunded liability of between $30 billion and $70 billion.

The state’s two main retirement systems have requested that the state contribute around $5.4 billion to the pension funds over the next two years — around a quarter of the state’s entire $21 billion budget.

Seum said the proposal would create jobs and boost tourism in Kentucky, which has already capitalized on the state’s signature bourbon industry.

“Out in Colorado these master growers are equal to our distillers,” Seum said.

Seum's son, Dan Seum Jr., is the veterans affairs director for Kentuckians For Medical Marijuana and has been lobbying state lawmakers about the issue for years.

According to the National Conference of State Legislatures, 29 states and the District of Columbia have passed laws allowing marijuana to be prescribed as a medicine.

Eight states and Washington D.C. have legalized small amounts of marijuana for recreational use.

Legal marijuana has been a non-starter in Kentucky, which has a state legislature that skews socially conservative and has no ballot initiative process in which voters can trigger a referendum to bypass the legislature.

Nearly 80 percent of Kentucky voters support allowing medical marijuana according to a 2012 Kentucky Health Issues Poll.

Seum hasn’t filed a bill yet, saying rules require revenue-generating legislation to be filed in the state House of Representatives.

He said he also supports proposals to expand gambling in the state. Two Democratic lawmakers recently proposed expanding casino gambling, estimating it would generate $236 million per year in tax revenue for the state, with an initial $325 million coming in from licensing agreements with the casinos.

Last month, Gov. Matt Bevin told WHAS Radio’s Leland Conway that legalizing marijuana and gambling is “not going to happen” as long as he’s governor.

This story has been updated to include that Dan Seum Jr. is an advocate for legalizing marijuana.