SCOTTSDALE INDEPENDENT By David Smith and Suzanne Klapp Oct 24th, 2016
We stand together as council members committed to finding a way to eliminate the 1.65 percent tax on food bought for home consumption in the city of Scottsdale.
This tax on food affects one of the most basic human needs and hits hardest those citizens least able to pay. It adversely affects working families, single parents and the elderly who are seeing no real increases in their social security income.
For citizens, the larger the family and the lower the income, the greater the penalty.
During this election cycle we have heard arguments from some of the candidates about why we should not remove this tax. The objections range from one candidate who says if we remove the food tax, then we will just tax the public somewhere else, to another candidate wanting to make sure we have enough money in the capital budget to improve our infrastructure.
Neither of these arguments are valid reasons to continue taxing food.
First – We would not have to raise taxes elsewhere! Eliminating Scottsdale’s tax on food consumed at home would reduce the General Fund by about $8 million a year.
For comparison, all sales tax to the General Fund is forecast to increase $20 million over the next five years…about three times the amount we might lose by eliminating the tax on food. Furthermore, this $20 million increase in revenues is on top of millions in other revenues such as property taxes, state shared taxes, and other excise tax and fee sources.
Simply put: To offset the food tax revenue loss, your council just has to stop spending every new tax dollar that comes in!
Second – This is not the right tax to pay for capital projects! Capital investments also benefit businesses, tourists and out-of-town property owners…none of whom pay any part of this tax on food. We should not pay for capital items with the most regressive tax any governmental body can impose on its residents.
During the last budget cycle, we agreed to move receipts from this regressive tax to the city’s capital budget to wean the city off dependence of this revenue stream. The move proved to be a good first step. We did not have to cut any city services and we continue to see greater receipts than expenses in our operating budget. However, neither of us support continuing to pad our capital budget with monies from those families and elderly least able to pay for food on the table.
None of the arguments against eliminating the tax recognize that Scottsdale is “out of step” with the state of Arizona, Maricopa County and our state’s most populous cities, including Phoenix, Tucson and Mesa…none of whom tax food consumed at home.
In fact, more than half of all Arizona residents pay no tax at all on food, thanks to the enlightened leadership of the state, county and major Arizona cities.
Now is the time to recognize that Scottsdale is an affluent city and should not be placing a tax on its least fortunate citizens…just because we can.