Whitehead: Too many unknowns at play to repeal Scottsdale's food tax now

More community dialogue needed, in addition to stabilization of city health, safety and economy

Posted 3/13/20

The elimination of Scottsdale’s food tax conjures up the old American adage, “Penny wise, pound foolish.”

It is never prudent to cut $14 million from a city budget without …

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Whitehead: Too many unknowns at play to repeal Scottsdale's food tax now

More community dialogue needed, in addition to stabilization of city health, safety and economy

Posted

The elimination of Scottsdale’s food tax conjures up the old American adage, “Penny wise, pound foolish.”

It is never prudent to cut $14 million from a city budget without identifying a replacement revenue stream or disclosing which city services and programs will be reduced or cut. Yet, council is being asked to do just that on Tuesday and without meaningful community dialogue.

The timing makes the tax cut even less palatable. We’re facing a global health crisis, an abrupt economic downturn, and the length, costs, and public needs caused by these circumstances are still unknown.

Don’t get me wrong, I support eliminating the food tax.

Scottsdale has the ability to remove the tax and still enjoy lower taxes than neighboring cities. But process and timing matter.

Tuesday’s unplanned tax cut, I believe, will negatively impact all of us, strain public safety, and disproportionately harm those the tax cut is supposed to help.

I also believe the discussion should be postponed until after the current health scare and economic downturn have stabilized.

The city is finally getting back on track after the recession and years of deferred maintenance. Maintaining infrastructure and investing in Scottsdale keeps us safer and saves money.

I have spent my first 15-months on council negotiating millions of dollars from developers and successfully advocating for increased efficiency and limiting City bond caps. I work hard to keep taxes low.

Repealing this modest tax won’t significantly improve our lives. Yet pooled together and prudently spent, the tax provides services and protections that we could never afford alone.

Sacrificing community safety for $225, at this time, is not good for Scottsdale.

A closer look at the food tax

Wrong time: Scottsdale’s economy took a steep and abrupt downturn that may worsen if we don’t prevent the spread of COVID-19.

To protect our community, Scottsdale staff likely work longer hours, require more resources, and possibly need new or expanded services. There is no certainty about costs or the length of time that is needed to stabilize the situation.

Compare apples to apples: Proponents argue that Phoenix and Mesa don’t have a food tax. True. However, both cities have higher overall taxes. Scottsdale sales tax is 1.75% compared with 2.3% and 2% respectively. The City of Tempe has a 1.8% sales tax and food tax.

Scottsdale voters could eliminate the food tax with a 0.15% overall sales tax increase and still have lower taxes than these cities.

Cost per household? The city treasurer estimates an average annual household cost of $225.

What do the taxes fund? The General Fund, Transportation Fund, and Preserve Fund. These funds pay police, fire, garbage, and parks. The city also has many programs and services that are critical to seniors and lower income residents such as afterschool and summer programs, senior centers and food programs, the trolley to name a few.

Who pays the food tax? Based on the demographics of our city, the majority of food tax revenue is generated by those that don’t qualify as low income: tourists, snowbirds, higher income residents, as well as residents from other Valley cities.

Remember, Paradise Valley doesn’t have a grocery store. This is a modest tax that allows all of us to do our part in protecting services listed above.

Editor’s Note: Solange Whitehead is a member of Scottsdale City Council

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