Desert Hot Springs is a fast-growing community well-known for the plentiful natural mineral springs scattered throughout its breathtaking landscape. Located approximately two hours east of Los Angeles, this city of about 28,000 residents is filled with spas, boutique hotels, restaurants and shopping. Upon first glace, Desert Hot Springs does not appear to be a victim of financial hardship. However, if you look beyond the surface of this resort town, you will find a recent history of extreme monetary distress.
After declaring bankruptcy in 2001, Desert Hot Springs was forced to reduce city spending last year to avoid having to file for a second bankruptcy. As reported by TheLeafChronicle.com, the Desert Hot Springs police department costs $6.4 million annually, which constitutes for up to 40 percent of the city’s budget. With a desperate need for quick and effective taxation, the Desert Hot Spring’s council members are weighing an option that may seem ironic to some, yet moral and long overdue to others to fund their lacking police department—they may finally lift an adopted ordinance (Ordinance No. 2008-24), which prohibits medical cannabis dispensaries from operating within city limits. We were able to catch up with City Manager Martin Magana to get all the details surrounding the city council’s upcoming decision.
While he could not speculate the estimated revenue that would be generated annually by medical cannabis facilities, Mr. Magana did share, “. . . there was a discussion among the city council that they impose a tax on medical cannabis, but that figure has yet to be determined. There was also discussion that an application fee of $50,000 be imposed on each application and that the amount of dispensaries be limited to three.” Along with the costly permitting fee, a 10 percent sales tax and a five percent cultivation tax have also been considered. These taxes are being examined separately, but combining all three is also a strong possibility
Mr. Magana explained how many other options have been considered in hopes of generating money for the city’s lacking public services. Measure F appeared on the June 3 city ballot, and it was grandly supported by City Mayor Adam Sanchez and Police Sergeant Gustavo Paiz. If passed, the vacant parcel tax measure would have raised the tax on vacant lots of land. This significant increase per acre from $29.80 to $372.68 did not go over well with the community, and the proposition was ultimately defeated by voters. This failure left the city scrambling to uncover a more reasonable option to generate large sums of money . . . and fast. Thankfully there seems to be optimism for a solution radiating from the city council.
City Councilman Joe McKee told The Desert Sun, “We’re obviously moving as quick as we can because we see dispensaries as a revenue source. With residents going to other cities for medical marijuana, it makes sense for us to move on it.” He went on to state that the reason Measure F didn’t pass is because it is often hard for people to impose taxes on themselves. While there are clear monetary advantages to legalizing medical cannabis, Councilwoman Jan Pye was eager to highlight benefits to patients as well. She reportedly told the paper, “Dispensaries mean we won’t have to dip into the general fund for public safety expenses, and residents who use medical marijuana will save money because they won’t have to travel across the freeway to get their medicine.”
While allowing medical cannabis dispensaries may be the best possible solution for all parties involved, City Manager Martin Magana told CULTURE about other solutions that may be implemented instead, “Other than medical cannabis, the city council is considering increasing the sales tax by one percent, making it nine percent, similar to the cities of Palm Springs and Cathedral City. The city council is also considering another vacant parcel tax measure with a different rate.”
No action has yet been taken towards making any of these ideas happen, but August marks decision month for the quaint town of Desert Hot Springs. According to Magana, after the various options are discussed at the city council meeting on August 5 voters can expect any resulting ballot measure(s) to be submitted to Riverside County soon after. This means that residents can expect a decision very soon. Despite what happens, it is clear that allowing medical cannabis dispensaries to operate is a win-win—the city gains substantial revenue, and patients have safe and convenient access to their medicine.