The Humboldt County Board of Supervisors on Tuesday listened to just about two and a half hours of testimony from financially determined hashish growers beseeching them to elevate the burden of Measure S cultivation taxes. However because the all-day assembly stretched previous the dinner hour, the board struggled to agree on a stage and method for tax aid and postponed its resolution to a particular assembly to be held someday subsequent week.
The extremely anticipated listening to bought off to a shocking begin when Supervisor Michelle Bushnell, whose Second District incorporates a majority of licensed hashish operations within the county, introduced that she can be recusing herself from the matter totally.
She didn’t absolutely clarify her reasoning till hours later, following the board’s resolution to desk the matter for a later date. At that time, Bushnell defined that she lately obtained a state license for her personal hashish firm, Boot Leg Farm, LLC, and after consulting along with her authorized counsel and reaching out to the Truthful Political Practices Fee, she determined it will be greatest to recuse herself in order that she didn’t jeopardize the proceedings along with her potential battle of curiosity.
Most of the greater than 60 public audio system had voiced frustration with Bushnell’s absence. She stated she was upset, too, and acknowledged that she might have dealt with the state of affairs higher. “I actually love my group and I’m very supportive of it — particularly the hashish group,” she stated.
The resolution at hand was whether or not to determine a program that would cut back, droop or waive the 2021 and 2022 tax payments from Measure S, the county’s voter-approved cultivation tax, which fees growers between $1.08 and $3.26 per sq. foot of licensed cultivation space.
Within the workers report, lately appointed Assistant County Administrative Officer/Chief Monetary Officer Tabatha Miller stated the native hashish business is struggling amid “unsustainably low market pricing.” She offered a listing of 10 attainable approaches to decreasing the county tax burden with a variety of income impacts:
The advice from County Administrative Officer Elishia Hayes was to droop one yr’s price of taxes for growers whose farms are 10,000 sq. ft or smaller, a proposal that will value — or at the least postpone — an estimated $3 million in revenues to the county’s common fund.
Miller famous that the monetary points buffeting native growers prolong effectively past the county borders. Shoppers are inclined to choose indoor-grown flower, whereas the vast majority of Humboldt’s crop is out of doors. State taxes are a lot greater than Measure S taxes. And counties to our south are allowing industrial-scale operations that add to the state’s oversupply of hashish.
Regardless, public commenters repeatedly recognized the county’s tax payments because the make-or-break for them personally if not the famend native business altogether.
“The business is dealing with an entire market crash [and] our local people is dealing with a mass extinction occasion,” stated Sara Bullock, proprietor of a 22,000-square-foot farm close to Kneeland. She has minimize bills drastically in an effort to remain afloat, she added. “I mortgaged my home to proceed to reside right here. I’ve no extra bills to chop. We’re an business in disaster. We might like to pay Measure S taxes however, merely acknowledged, the cash shouldn’t be there. We can not pay.”
Samantha Phillips stated her firm, Mojo Mountain, employed practically 50 individuals however has been pressured to put off most of its workforce. “As a mom it’s heartbreaking to inform individuals with households that we will not afford to maintain them,” she stated. “The present tax construction on the state and county stage is crippling our capability to outlive and navigate this new market we are actually in.”
Others made extra grandiose proclamations. One man, for instance, characterised the tax as “extortion” and accused the board of committing “cultural and financial genocide.”
One of many audio system to take problem with Bushnell’s absence was Craig Johnson, proprietor of Alpenglow Farms, who stated her recusal on this agenda merchandise successfully subjected 80 p.c of the county’s farms to “taxation with out illustration.” (Planning and Constructing Director John Ford later informed the Outpost that the 80 p.c determine sounds a bit excessive, although he didn’t have a precise determine at hand.)
“I’m actually rattled by Supervisor Bushnell not with the ability to be a part of this dialog,” Johnson stated. “We’re gonna need to resolve this and discover out why our supervisor can’t characterize us.”
Ross Gordon, coverage director with the Humboldt County Growers Alliance (HCGA), stated taxes akin to Measure S are predicated on the belief that hashish is “wildly worthwhile” when the truth is that growers are burdened by prices and challenges confronted by no different kind of agricultural producers.
“And I feel the message that we wish to carry you right now is that that paradigm is over,” he stated. “It’s not there anymore. It merely can’t work to proceed levying these charges.”
HCGA Government Director Natalynne DeLapp stated already deferred tax payments from October and March should be forgiven and waived totally “lest the county ship a deathblow to an untold variety of our hashish operators.”
The calls stretched into the night, despite the fact that Board Chair and Fourth District Supervisor Virginia Bass had restricted every speaker to 2 minutes apiece. Caller after caller relayed particulars of their monetary woes and referred to as on the county to droop or waive their tax payments and develop a brand new taxation mannequin.
Licensed hashish farmer Thomas Mulder, who’s Bushnell’s appointee to the Humboldt County Planning Fee, stated the present market collapse was an unforeseeable disaster, albeit one he expects to be short-term.
Mulder’s younger son referred to as later within the assembly and stated, “Please don’t make households need to work so arduous that they can’t spend time with their children.”
After a short break, the supervisors reconvened, and of their preliminary feedback they threw some chilly water on the onslaught of lamentations they’d simply listened to.
First District Supervisor Rex Bohn, for instance, urged the audio system to trace down this story from CalMatters, which quotes Nicole Elliott, director of the California Division of Hashish Management: “It’s an oversimplification to say that tax discount will clear up all the business’s issues. It’s only a huge oversimplification of the variety of variables that influence the well being of the authorized market and that help or foster criminality. It isn’t tax alone.”
“That scares the hell out of me,” Bohn stated, including that the county’s tax is a minor issue within the grand scheme of issues.
Third District Supervisor Mike Wilson agreed. “I don’t suppose that [the] Measure S tax created the state of affairs that we’re in,” he stated. The principle issue within the native market collapse is out-of-county opponents who’re “rising a plant in a extra environment friendly and less expensive method and delivering it to the market at a a lot lower cost than the methodology that was created in Humboldt to develop hashish below prohibition.”
And but each Bohn and Wilson went on to say they’re open to providing tax aid, as did fellow supervisors Bass and Steve Madrone.
Bohn stated he was a wide range of choices, together with a 50 p.c discount throughout the board — which means for indoor, out of doors and mixed-light growers of all sizes — or perhaps full suspension of taxes for grows below 10,000 sq. ft.
“I’ve additionally bought one other [idea] float to the highest now — it’s droop the whole lot for a yr and are available again and have a look at it, as a result of this drawback got here on us in six months,” he stated. As lately as July, he stated, hashish growers have been telling him how good issues have been, “and by August 15 it had proverbially hit the fan.”
Wilson stated he thinks some “important reductions [in tax liability] are warranted based mostly available on the market.” There’s been little in the best way of arduous information, he stated, however he surmised that over the previous two years the market value for a pound of out of doors has gone from round $1,200 to round $400. He prompt that the county may reply by providing a corresponding two-thirds discount of taxes throughout the board.
Various audio system had lamented the perceived injustice of a tax lien encumbering their property ought to they turn into delinquent of their tax payments, however Ford defined that whereas every allow is linked to a specified property, power nonpayment would merely lead to revocation of the allow, not a lien towards sale of the property.
There was some dialogue about organising cost plans for tax payments, however Treasurer-Tax Collector John Bartholomew stated county code dictates that hashish taxes have to be collected in the identical, or related, methodology as all different taxes.
“And so I’m against creating installment plans buildings particular for hashish tax collections,” he stated. Bartholomew additionally reminded the board that the county taxes growers in arrears, which means the tax payments despatched out in 2021 coated taxes due for the 2020 calendar yr, and so forth.
A number of audio system referred to as on the board to forgive tax payments despatched out final yr. Bartholomew objected to that concept.
“I feel it’s unfair to all of the hashish cultivators that did pay their 2020 taxes within the 2021 yr for the board to be contemplating waiving any excise taxes from that interval,” he stated, noting that 80 p.c of small growers have already paid these payments. “Now we have to deal with everyone the identical with regard to taxation. I’m adamant about that.”
When Madrone was provided an opportunity to talk, he did so at size, discussing the distinctive challenges dealing with the hashish business, the precedents for presidency help to industries, the folly of the county’s Measure S flat-tax construction, the inflow of unlawful product from Oregon and extra.
Ultimately he stated would help a tax break as a result of he believes Measure S revenues for final yr and it will drop dramatically both method — whether or not by means of a minimize from the county facet or attrition as a consequence of enterprise failures.
Madrone stated he completely would help working with the business and going again to the voters with an all-new taxation measure to interchange Measure S. He additionally proposed the opportunity of tax credit for photo voltaic power or water storage set up.
It was getting late within the night, and Bass stated she didn’t suppose the board would attain a choice that evening. The 4 collaborating supervisors every provided proposals for kinds of tax breaks.
Wilson proposed providing growers in tier one (which means out of doors sun-grown weed) a 50 p.c discount on 2021 taxes with growers in tier 2 (blended gentle) getting a 25 p.c break and 0 break for the small fraction of authorized indoor growers.
Bohn’s concept was to forgive subsequent yr’s Measure S tax payments totally after which reassess the next yr, a proposal that Wilson was “not all that enthusiastic about.”
Madrone had a wide range of his personal concepts however stated he’d be supportive of Wilson’s tier-based proposal.
It was after 6:30 p.m. when the board agreed to desk the dialogue and proceed it at a particular assembly subsequent week. (In all probability Monday, Hayes stated.)
One remark in regards to the day’s lengthy proceedings: It seems like Bushnell’s resolution to recuse herself could have lasting repercussions along with her core constituency of hashish professionals.
In the midst of the assembly, the Humboldt County Growers Alliance posted a statement to its Fb web page reiterating the argument that “80% of Humboldt’s Hashish Farmers Simply Misplaced Their Consultant.”
On Wednesday morning, Bushnell fired again, calling it “completely ridiculous” to imagine “that 4 different Humboldt county supervisors don’t characterize everything of the Humboldt County hashish tradition.”
Although it was an extended, lengthy deliberation, the Measure S matter wasn’t the one merchandise on yesterday’s agenda. We’ll rewind a bit, right here, to the start.
After the routine passing of the consent calendar, the day’s first agenda merchandise was the most recent “required month-to-month report” from embattled Auditor-Controller Karen Paz Dominguez. She was once more requested to supply an replace relating to the ongoing mess of county payroll providers, a job that was transferred back to her department final August regardless of worker issues.
It’s arduous to flee the impression, in these updates, that the 2 sides are speaking previous one another. Paz Dominguez as soon as once more delivered a prolonged and scrupulously detailed PowerPoint presentation replete with lists, spreadsheets, a flowchart and painstaking explanations of the county’s byzantine fiscal procedures.
And but, regardless of the sheer quantity of data relayed in these studies, supervisors and division heads inevitably return to a handful of questions which have come up many times over the previous yr or so: What’s the standing of excellent journals from earlier years? Why haven’t the books for these years been closed but? What’s the holdup on calculating curiosity apportionment for the final fiscal yr?
Paz Dominguez started by outlining some areas during which progress has been made on the payroll perform, together with the event of written insurance policies for a wide range of computational duties, improved compliance by means of “revolutionary reporting mechanisms” and the buildup of workers experience within the county’s payroll software program.
She went on to checklist some ongoing challenges with payroll, together with continued short-staffing as a consequence of vacancies, community reliability points, miscommunication about timelines and processes and “board actions that require quick or fast implementation.”
Concerning the latter, Paz Dominguez stated, “It is a problem to payroll, however it’s not an accusation that you simply’re doing something flawed. Please don’t take it that method.” Nonetheless, a seemingly easy request from the board can require a bevy of retroactive changes. “[I]t is without doubt one of the challenges that we’re dealing with proper now,” she stated. “Can we get higher? Completely.”
Addressing alternatives for development, Paz Dominguez stated she typically hears that folks need sooner responses to questions on payroll. “They need to have the ability to discuss to somebody on the cellphone straight away, and we now have very restricted workers who’ve entry to the payroll module,” she stated. Her concept, which she stated she’ll possible carry earlier than the board quickly, is to reclassify workers in her workplace to “administration and confidential” standing, which means they’d be elevated above the rank-and-file union members that comprise the overwhelming majority of the county’s workforce.
She additionally stated there are inefficiencies and duplication of labor throughout county departments, so she prompt that these month-to-month payroll studies be broadened to incorporate others, not simply her.
The presentation was sometimes interrupted to deal with board questions, and whereas the exchanges by no means bought overtly hostile, the underlying frustration was clear. Bohn, for instance, peppered Paz Dominguez with questions on why the assistance being provided by exterior accounting company MGO hasn’t been adequate. Second District Supervisor Michelle Bushnell had questions on financial institution reconciliations, the method of matching the county books to financial institution statements.
Paz Dominguez repeated an allegation she had made beforehand, that till lately financial institution reconciliations weren’t being accomplished. It’s a declare that Bartholomew has disputed, however she was adamant.
“I’d swear that below oath,” she stated. “Come over the the workplace and I can present you what documentation is right here.”
Bartholomew once more took problem.
“I personally know that our controller workers used to go over each financial institution assertion that we obtained month-to-month, evaluate that to the treasurer day by day [report], after which ensure the whole lot was precisely mirrored within the common ledger,” he stated.
“We don’t need to agree,” Paz Dominguez stated. “I already know that we don’t have any financial institution reconciliations. The method for financial institution reconciliation is a straightforward method and not one of the documentation we now have even resembles it.”
The board and workers had a wide range of different questions for her. Bohn questioned her proposal to make staffers in her division “administration/confidential,” Wilson questioned the timeliness of bill funds and Bartholomew requested a few recurring glitch in calculating worker retirement financial savings accounts.
Paz Dominguez stated lots of the ongoing points are systemic, with accountability mendacity throughout a number of departments.
Through the public remark interval, an worker within the county’s social providers department, Neil Bost, referred to as in to say that payroll errors brought about him to receives a commission “subsequent to nothing” for 2 consecutive pay intervals, leaving him unable to pay his payments.
“The method of receiving my corrected funds required quite a few cellphone calls and emails to varied departments throughout the county, during which I used to be given incorrect timeframes for after I can be paid on a number of events,” Bost stated. “This expertise has made me severely contemplate ending my employment with Humboldt County, and it has actually prevented me from recommending working for Humboldt County to anybody that I do know.”
Paz Dominguez stated she couldn’t talk about particular worker data however added that worker confusion and frustration is commonly created as a result of there is no such thing as a central level of contact for resolving such points.
Towards the tip of this listening to, Wilson remarked on the amount of data Paz Dominguez had offered, saying, “I feel there are some actual ways in which we will summarize that” and distill it all the way down to one thing extra digestible, “as a result of there’s no method we will eat this a lot data each month. … We’re gonna have to determine a greater method.”