This November the voters of Washington State will get to decide on Initiative 502, which would legalize, tax and regulate marijuana. If they approve the ballot measure, and the federal government allows it to operate, it could eventually generate over half a billion dollars in new revenue ever year for the state according to the official analysis by the State’s Office of Fiscal Management.

According to the report, if the program is allowed to run as intended, by 2015 it could bring in over $560,000,000 annually in revenue from taxes and fees at the state and local level. The administration of the program would only cost that state roughly $16 million per year, which would mean the state would net over half a billion in new funds thanks to the legalization and taxation of marijuana. Over the five year fiscal window looked at by the OFM, total revenue generated for the State could potentially be as high as $1.9 billion.

The estimates are subject to many important unknowns that could significantly impact how much is actually raised if the measure wins approval. The most important issue is how the federal government will react. Obviously if the federal government chose to defy the will of the electorate in Washington and put significant efforts into aggressively enforcing federal laws against marijuana, it would significantly hamper the state’s ability to collect new revenue. If, on the other hand, the federal government chose to adopt a more hands off approach respecting the will of state voters, marijuana legalization would likely turn into a huge revenue windfall for the state.

For comparison the annual revenues for Washington State are roughly $15 billion, so the legalization of marijuana could make a significant contribution to the State’s coffers. It could potentially allow for a noticeable increase in spending on programs or a cut in other taxes.