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Smith: I urge Scottsdale City Council to consider elimination of 1.75% sales tax on food for home consumption

By David Smith | Free Press Point of View

As you hear and discuss the preliminary fiscal year 2023/24 budget, I urge you to provide guidance to staff to modify their revenue projections in at least one important respect: Eliminate Scottsdale’s local 1.75% sales tax on food purchased for home consumption.

Photo of David Smith who is a former member of Scottsdale City Council
David Smith

·This is the most regressive tax any city can impose on its citizens.

· This is a tax not imposed by the state of Arizona nor the cities of Phoenix, Tucson, Mesa and others. More than half of all Arizonans pay no tax on food purchased for home consumption.

·Scottsdale’s food tax last year was $16.4 million:

*For each of our 242,000 citizens that’s an average of $67.48;
*For a family of four it’s $269.93;
*For every needy family that cannot afford to regularly dine out, substantially more!

For them, our neediest citizens, it is more than a large dollar burden: As a percent of their smaller disposable income, it is a huge burden!

· Continued imposition of this tax for decades has enabled multi-million increases in carryover reserves for the General Fund, for the Preserve Fund, for the Transportation Fund.

·This is an embarrassing tax for a city of Scottsdale’s affluence and cachet to continue imposing.

You must remember that staff is obligated to develop for Council a “Balanced Budget.” If some or all this revenue is eliminated from the FY 2023-24 budget, expenses of a like amount must be eliminated as well. That may mean we will have less savings to add to our year-end reserves; it may mean we will have fewer new services to introduce or expand; it may mean we will be less able to pay down pension debts; etc.

Whatever offset is proffered as a tradeoff to this revenue loss, as yourselves, “Is this a reasonable trade-off for eliminating the most onerous, regressive and embarrassing tax the city imposes on its citizens?” Other cities have found a way to deal with this challenge – we can too.

There are always unknowns in the economy ahead, but those unknowns should not be insured on the backs of our neediest citizens – year, after year, after year! Elimination of this tax has been discussed by every council for years – even decades!

And every prior discussion has ended with the majority of City Council agreeing the tax is unfair and regressive, but then voting, “Now is not the time.”

While the debate has continued, our local sales tax revenues have steadily climbed – year, after year, after year. In FY 2012-13, local sales tax actual revenues were $144.9 million; 10 years later, in the FY 2021/22, they were $286.4 million – almost double! And in tonight’s FY 2023/24 budget, they will be forecast higher still. If now is not the time…when will be the time?

You represent our neediest citizens in ways they cannot articulate for themselves. Have the courage and compassion to make now — tonight — the time for change.

Thank you for your consideration.

Editor’s note: Mr. Smith is a former elected leader of Scottsdale and Charter officer at City Hall.

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