Scottsdale City Council candidates differ on local food tax perspective

City Hall Election Art

Local voters will hit municipal polls Tuesday, Nov. 8 to elect three people to Scottsdale City Council and a mayor after foregoing a primary election process — the result of a limited number of candidates.

Scottsdale mayoral candidates are Mayor Jim Lane and challenger Bob Littlefield while council candidates are Dan Schweiker and incumbents Suzanne Klapp, Virginia Korte and Guy Phillips.

The Scottsdale Independent and Scottsdale Area Chamber of Commerce is hosting two debates in addition to a weekly question-and-answer series provided by the Independent to help voters better understand where candidates stand on local issues that matter.

The first debate, sponsored by Comerica, will be Tuesday, Sept. 27, focusing on the mayor’s race while the second debate, Tuesday, Oct. 4, will focus on city council candidates.

Both debates are from 6 to 8:30 p.m. at the Doubletree Resort by Hilton, 5401 N. Scottsdale Road and will be moderated by Scottsdale Independent Editor Terrance Thornton.

This week’s question-and-answer installment is on if these political candidates have the desire to abolish what many believe to be a regressive tax in Scottsdale: the food tax.

The cost of food

Since 2004 the city of Scottsdale has been assessing a 1.65 percent sales tax on all grocery goods sold within city limits, but a tax on food was first assessed in 1958 through ordinance 50, city officials say. Until earlier this year, 1.1 percent was dedicated toward the General Fund while the remainder was divided into the city’s transportation and preserve funds, city leaders say.

Scottsdale City Council last January voted 5-2 to take 1.1 percent of the 1.65 percent retail sales tax assessed on all grocery sales within city limits — a total of about 7.8 million this fiscal year — and funnel those dollars into the capital improvements budget forecast.

Scottsdale City Council members Virginia Korte and Linda Milhaven were the dissenting votes.
The entire 1.65 percent food tax will account for about $12 million in fiscal year 2016-17, Independent archives state.

Scottsdale Councilman David Smith has gone on the record and vows to abolish the food tax during his time on council whereas the January allocation change to food tax remits came by the formal request of the councilman.

The mayoral race

Both Mayor Lane and challenger, Mr. Littlefield, agreed to respond to specific questions about the food tax. This is what they had to say:

Jim Lane

•Do you think having a food tax in the city of Scottsdale is appropriate?

Jim Lane

Jim Lane

I believe that “food products consumed at home” are a basic necessity of life and as such, a tax on these necessities places an undue and inappropriate financial burden on people, and particularly young families and seniors.

In general I believe in lower taxes, which is why I am particularly proud that I led Scottsdale during the Great Recession without raising taxes.

•If elected, will you work to have that tax abolished?

This council established a path to ween the city from the use of food tax funds over a period of three years. If re-elected, I will be a vote to follow through with this plan to amend our city sales tax code to exempt “food consumed at home” from sales tax. It will be much easier to achieve this objective if our city is otherwise generating robust revenues through a pro-business approach and a good local economy.

This is a key difference between my opponent and I. He’s so anti-business he’s even called for shutting down small businesses in downtown and returning Scottsdale to the economic malaise we endured some 15 years ago when everyone was asking what was wrong with our city. My opponent’s biggest political contributor over the years was an anti-business union that even used scorched earth tactics to try and kill beloved local grocer Bashas’. Being pro-business means being pro-residential so we have the reserves to protect Scottsdale’s quality of life, and phase out things like the food tax.

Bob Littlefield

•Do you think having a food tax in the city of Scottsdale is appropriate?

Bob Littlefield

Bob Littlefield

No. While Scottsdale is generally an affluent community, we do have many residents who live on fixed incomes for whom the food and property tax are challenges. So we should work to keep property taxes low and to eliminate the food tax.

•If elected, will you work to have that tax abolished?

Yes. Like any other fiscal issue, eliminating the sales tax on groceries is about priorities. For my opponent, keeping our property taxes low and eliminating the food tax is not as important as wasteful spending and special interest handouts.

I will reverse those priorities if I am elected mayor.

When my opponent first ran for mayor in 2008 he promised to “develop a plan to eliminate the sales tax on groceries by the end of my first term.” Why didn’t he keep this promise? He will no doubt claim the economic downturn prevented him from eliminating the food tax. But the facts tell a different story.

Scottsdale residents pay the second highest General Fund cost per resident of any city in the Valley — only Tempe residents pay more. And, Scottsdale has more employees per resident than any other city in the Valley. Interestingly, staffing for public safety — which should be the No. 1 priority of municipal government — isn’t the issue; those numbers are right in the middle of the pack. However, Scottsdale is overstaffed with executives, 155 of whom make six-figure salaries.

Because they were unable to run a tight fiscal ship at City Hall, the only way my opponent and his allies were able to technically balance the operating budget was by cutting contributions to the capital budget. Which is why my opponent has voted to increase our property taxes twice in the last five years!

Bottom line: my opponent didn’t keep his promise to eliminate the sales tax on groceries because he didn’t keep another of his campaign promises that was to run a “fiscally responsible and efficient government.” Simply put, my opponent and his allies needed the money from the food tax to pay for their wasteful spending, special interest handouts and unwillingness to cut spending at City Hall.

This fiscal irresponsibility is yet another reason why we need new leadership at City Hall, and why I am asking for your vote for mayor in November.

The council race

City council candidates agreed to respond to specific questions about the food tax. This is what they had to say:

Dan Schweiker

•Do you think having a food tax in the city of Scottsdale is appropriate?

Dan Schweiker

Dan Schweiker

No, I do not feel it is appropriate or a good policy. The sales tax on food impacts those least able to afford it the most. Scottsdale can be fiscally prudent and still find ways to offset the lost income from a tax that most other Arizona cities have abolished.

•If elected, will you work to have that tax abolished?

Yes, I would work closely with David Smith to abolish it. While the outside world tends to view Scottsdale as all resort like living, Councilperson Smith is right that almost 9 percent of our residents are actually under the poverty line.  Many more are not far above it or may be elderly. Since those lower on the income level spend a greater proportion of their income on necessities, having a sales tax on food has a greater impact not only on the poor but also the 20 percent of our residents who are over 65 and may live on a fixed income.

Scottsdale can find a way to live without the sales tax on food. Phoenix found a way to abolish the tax on retail food and Scottsdale should do the same. Councilperson Phillips stated that it is not regressive but he is wrong. A regressive tax is one that takes a larger percentage of income from low-wage earners than from high-income earners. Even though the tax may be uniform, lower-income consumers are more affected by it.

Virginia Korte

•Do you think having a food tax in the city of Scottsdale is appropriate?

Virginia Korte

Virginia Korte

Nine out of 10 cities in Maricopa County tax food for home consumption.  Our current tax rate is 1.65 percent, of which 0.35 percent is designated for our McDowell Sonoran Preserve land acquisitions and amenities; 0.20 percent for transportation; 0.10 percent for public safety and the remaining 1.0 percent is for our General Fund.

The total revenue impact if the tax on food for home consumption was eliminated would be approximately $11 million annually.  Our Preserve would receive about $3.85 million less a year.

The average tax on food paid by Scottsdale residents with an income of $72,102 is $7.50 a month.  I believe that is affordable for a majority of our residents to pay for many of our quality-of-life services and amenities – including public safety and the Preserve.

•If elected, will you work to have that tax abolished?

My primary concern as a member of the city council is solving our need to invest in capital infrastructure.
The city and citizen task forces have identified over $300 million needed for investment in capital infrastructure for which our citizenry did not support in prior capital bond elections. Abolishing the tax on food for home consumption exacerbates this problem. With this in mind, the city council approved the transfer of 1.1 percent of the food tax to our capital improvement budget to be reinvested in the city’s assets.

This is a three-year phase-in process, with a current fiscal year transfer of approximately $2.5 million.

Suzanne Klapp

•Do you think having a food tax in the city of Scottsdale is appropriate?

Suzanne Klapp

Suzanne Klapp

No. I have been on the record opposing the regressive food tax in Scottsdale for quite some time. Some may think that Scottsdale is an entirely affluent community, so the food tax does not matter to our citizens. Yet, there are populations of the city residents whose average income is less than $25,000 per year, well below the federal and state poverty line.

It is particularly hard to defend such an unfair sales tax on groceries for these working families, single parents and fixed-income seniors, who spend a larger percentage of their hard-earned wages on groceries than higher income residents.

•If elected, will you work to have that tax abolished?

Yes. When the city was experiencing high tax revenues before the recession in 2008, the food tax should have been eliminated then. It was not. Some other Valley cities, such as Phoenix, Mesa and Surprise, do not now charge such a tax on groceries.  Others are considering abolishing a food tax.

When this issue came before the council, I supported eliminating the tax on groceries. The majority on the council eventually agreed to removing food tax revenues from general operating funds and placing them in the capital budget instead. I supported this change as a temporary measure to wean the city off its dependence on this revenue stream in our operating budget.

Even so, I am not happy about lower income people in our community paying an unfair and burdensome sales tax to help the city complete capital projects. I support taking the next step by eliminating the food tax entirely.

Guy Phillips

•Do you think having a food tax in the city of Scottsdale is appropriate?

Guy Phillips

Guy Phillips

I don’t know who or when the tax was first applied and why, but to remove it now would require an additional tax somewhere else to make up for the loss in revenue that the city is now reliant upon and no one on the council has suggested where that would come from. They are all willing to raise your property taxes, yet that will cost you way more than a food tax ever will.

•If elected, will you work to have that tax abolished?

The city sales tax on food is such a small percentage of overall taxes I would rather reduce the property tax. During the recent mini-depression we all went through, over half the foreclosures in the state were due to delinquent property taxes.

That is, people lost their homes because of mounting property taxes they couldn’t pay. No one lost their home because they couldn’t pay the penny on their food. Let’s stop raising our property taxes for special interest projects that put a heavy burden on the homeowner and instead reduce it by fiscal responsibility. That will put real money back in your pocket!

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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