SCOTTSDALE INDEPENDENT David Smith Jan 8th, 2016
It’s the start of a new year…a time to make new resolutions and revisit the ones unfulfilled in 2015.
Very soon, we will begin the budget season at the city and I’m sure we’ll applaud another year of growth in city revenues. We won’t refer to this pleasant surprise as an “increase in taxes,” though we should humbly acknowledge it means we’ve taken more money from citizens and visitors this year than last.
As the budget process proceeds, we will revisit one resolution of 2015 that remains unfulfilled…the elimination of our 1.65 percent sales tax on food bought for home consumption. Some readers may recall the council’s discussion last Feb. 24; the official record for that meeting gives a single sentence summary: “There was general consensus not to make changes for FY2015/16, but to continue to look at this issue as part of the budgeting process.”
The basic tenants of the discussion last year are just as true today:
First, a sales tax on food is the most regressive tax any governmental body can impose. It taxes one of the most basic human needs and it hits hardest those citizens least able to pay. Every Council member who spoke last year agreed! The tax doesn’t hit tourists. It doesn’t hit business. For citizens, the larger the family and the lower the income, the greater the penalty.
Second, Scottsdale is “out of step!” Arizona does not impose a state tax on food consumed at home. Within Maricopa County, 54 percent of all residents also pay no local sales tax on food, reflecting the food tax exemptions of Phoenix, Mesa and several small communities. In fact, more than half of all Arizona residents pay no tax at all on food, thanks to the tax exemption leadership of the Maricopa County cities plus Tucson.
Third, eliminating the sales tax on food wouldn’t mean a cut in city services. Scottsdale’s tax on food consumed at home enriches the general fund by about $5 million a year. For comparison, all sales tax to the general fund was forecast to increase $20 million over the next five years…four times the amount we might lose by eliminating the tax on food!
Furthermore, that forecasted $20 million increase in revenues is on top of an increase of millions in other revenues like property taxes, franchise fees, state shared income taxes, and the like. Simply put: to offset the food tax revenue loss, your council just has to stop spending every new tax dollar that comes in!
Watch the discussion of food sales tax closely in the weeks to come. Arguably, the entire city budget affects each of us, but the proposal to exempt food from local sales tax is the only initiative that could actually reduce every citizen’s tax burden in a meaningful amount.
It’s time to make good on a 2015 Resolution. Scottsdale, as one of the most affluent communities in the state, should demonstrate equity – if not compassion – toward its less fortunate citizens. We have lost the opportunity to be a bold leader on this initiative; let’s at least be an enlightened follower.