The Phoenix City Council will discuss options for the city’s food tax during a public policy meeting on Wednesday, including an idea to phase out a portion of the tax beginning January of 2014.
The meeting will take place at 2:30 p.m. on May 1 and will be streamed live at phoenix.gov.
The agenda item calls for authorization from the City Council to explore additional options for the food tax. City staff is recommending additional analysis on the potential phasing out of the food tax and would return by Sept. 18, 2013 to the council for possible action.
Council members Michael Nowakowski and Thelda Williams sent a letter to City Manager David Cavazos recently asking him to bring forth a budget that eliminates 50 percent of the food tax, effective Jan. 1, 2014, without any cuts to public safety or other community services. This would mean a reduction from 2 percent to 1 percent, or an estimated $12.1 million in revenue reduction in fiscal year 2013-14.
A report from city staff said: “Staff believes that a potential phased reduction implemented with a fully-vetted fiscal plan that maintains services would be perceived positively by the rating agencies,” so Phoenix’s AAA bond rating would be maintained.
If council agrees staff will evaluate alternative revenue sources, evaluate ways to enhance economic development, further intensify efforts of innovation and efficiency, conduct an organizational review, review the possible sale of surplus properties, and evaluate new ways to use technology.
City Councilman Sal DiCiccio warns that while the item is on the agenda the language in the report may cause this item to be stalled.
“The vote was to send a clear and convincing message that half the food tax would be removed by January 2014,” he said in a statement. “However, backroom dealings and shenanigans are in play that may give you the perception this is going to happen when in fact it will be a stall tactic.”
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