Phoenix OKs plan to start phasing out food tax

PHOENIX — The City Council has approved a plan to begin phasing out an “emergency” 2-cents-per-dollar tax on food imposed in 2010 to help address a massive budget deficit.

The council voted 8-1 Wednesday to decrease the tax to 1 cent per dollar as of Jan. 1 and let it expire, as originally planned, in April 2015.

Councilman Michael Johnson, who voted against the proposal, said residents want services such as library hours restored to the level they were before the economic downturn, something he said won’t be possible with the food tax cut.

“I was very disappointed that it was passed,” Johnson said. “The will of the people was not to end the food tax.”

Councilman Sal DiCiccio, who opposed the sales tax, said poor families who put more of their income toward food will benefit from the phaseout, in part because he said the money is now going toward raises for city workers.

“You’re going to start seeing people at the lower-income level not having to subsidize their pay raises,” he said.

The food tax, which was created in early 2010 to address a $277 million deficit on a $1 million budget, costs a family spending $150 a week on groceries about $150 per year.

The debate over the tax was polarized as opponents of repealing it raised concerns about the impact on city services. In 2011, Mayor Greg Stanton backed off a campaign promise to remove the tax, citing possible cuts to public safety programs.

In August, outgoing City Manager David Cavazos laid out a plan to make up for the estimated $33.4 million that would be lost by halving the food tax. It included refinancing the city’s debt and selling surplus land.

Greta Rogers, a Phoenix resident who addressed the council before the vote, said the best move would be continuing the food tax until its planned expiration in 2015.

“We can’t move forward in the fragile state of the finances of this city,” she said.

“I believe we are going to end up cutting services to the same people that this is supposed to help,” said Dave Meiner, another Phoenix resident. “I believe it’s irresponsible to cut our income at this time.”