Phoenix City Council votes to keep 2% food tax in place

by Lynh Bui – Oct. 26, 2011 12:00 AM
The Arizona Republic

Residents in Phoenix will keep paying a 2 percent tax on their groceries after the City Council voted Tuesday to keep the controversial food tax in place.

Hundreds of Phoenix firefighters and residents packed Council Chambers urging elected officials to keep the food tax to prevent cuts to public safety and other city services and programs.

After more than two hours of debate and testimony, Councilwoman Thelda Williams suggested Phoenix come up with a plan to repeal the city’s food tax by July. Williams, however, didn’t have the five out of nine votes needed to get rid of the tax before its scheduled 2015 sunset.

Council members Sal DiCiccio, Bill Gates and Jim Waring voted with Williams.

Mayor Phil Gordon and Council members Michael Johnson, Claude Mattox, Michael Nowakowski and Tom Simplot all voted to keep the food tax, which brings in nearly $50 million annually.

The council minority’s failure to reverse the food tax means the issue will remain a hot campaign topic until the runoff election on Nov. 8. It isn’t likely to be revisited until after the next mayor and new City Council is sworn into office in January.

Council members who wanted to keep the tax weren’t convinced there would be a good enough plan in place to replace its revenue without sacrificing city services.

They also said keeping the food tax in place for now would allow more public input on the matter as the city prepares to develop its budget for the 2012-13 fiscal year.

Gates gave a list of options in the budget that could replace the food tax, such as general fund surplus and special sales taxes to fund public transit and public safety.

Gates said while “it’s not responsible to vote to end the food tax today” he was convinced that elected officials, city management and the public could come up with a plan to end the food tax by next fiscal year.

Councilman Tom Simplot was the key vote in the matter, saying there already is an expiration date in place and said residents are willing to pay $4 to $5 more a month to maintain their quality of life.

Mayoral candidates Wes Gullett and Greg Stanton have called for an early end to the food tax but disagree on the timeline. Gullett wants the tax lifted by July and says he’d provide the fifth vote to do that.

Stanton said it should end April 2013, allowing more time for the city to fully evaluate the impact of its repeal.

Gordon said it will be up to the next administration to decide.

“I don’t deny that there’s money that can be found in our budget,” Gordon said. But the city should “do it with the new body so they can hear all the discussion.”

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