Phoenix Needs a Food Tax. Not!

by Mike Renzulli

Citing budget problems and potential layoffs of police officers and fire fighters, the Phoenix City Council enacted a 2 percent tax on groceries at the beginning of February. 

The ordinance they implemented changed language in a previous law that allows them to levy it. Since I moved to Phoenix in 1991, I never had to pay a tax on my groceries and, fortunately, I continued not to do so when I lived in Mesa for 5 years since that city doesn't have a tax on groceries there either.

Phoenix politicians are holding hearings across the city to get feedback. But, I am told, the meetings are not only about whether or not the city should have a grocery tax but also how much money each interest group that shows up can secure a kickback.

I would not be surprised if Phoenix police and firefighter unions are pushing for an even higher rate than the Phoenix politicians are proposing.

If the costs of city services become too much to fund, I believe it is very hard (though not impossible) for them to be privatized.

Prior to my moving to Mesa in 2000, I recall one ballot measure approved by Phoenix voters that requires a public vote on privatizing an essential city service such as the fire department.

If my recollection is correct, as a result of this charter change it makes it difficult for even city ambulance service to be privatized by the council putting Phoenicians on the hook by making the city's fire and other services covered by the amendment entitlements by default.

If this charter amendment is in place, any proposal to privatize fire or even garbage collection services would be heavily opposed by public employee unions and they would mobilize their members and like-minded constituents to make a rejection of privatization of many services run by the city very likely.

Fortunately, critics of a city food tax are taking action to stop it. The Maricopa County Libertarian Party has taken out a referendum to reverse the Phoenix council and mayor's actions.

The Maricopa County L.P. needs a minimum of 10,000 signatures in order to put the ordinance allowing the enactment of a food tax on the ballot and has until the 5th of March to do so. As far as I know, there are numerous efforts to collect signatures underway by activists (like myself) linked to this campaign.

If the effort on the part of the Don't Tax Our Food campaign is successful, the council could recind it's actions before it is put to a public vote. If they do not, then the removal of the food tax pre emption language that was enacted will surely be rejected by voters leaving the grocery tax exemption in place.

It looks like the anti-food tax campaign might have a good shot at getting the grocery tax on the ballot. I attended a meeting they held on Tuesday the 16th and the impression campaign heads Jim Iannuzo and Warren Severin have is that there are quite a few people circulating petitions.

The city council and mayor pitched the grocery tax as a way to prevent layoffs in the Phoenix police and fire departments. Yet this claim is fast becoming shown to be a fraudulent claim.

The city of Phoenix still spends money on services like libraries, parks, after school programs and the arts that are not only not essential, but things that are not the functions of government to undertake.

Recently, the city announced it would spend $6 million to buy a downtown Phoenix vacated hotel to assist Arizona State University in it's downtown campus expansion. [1]

Furthermore, it's a fact that the city council recently raised fees on numerous city-run services like swimming pool passes, garbage collection and parking meters. [2] To make matters worse, voters approved a tiny hike in the city's sales tax in 2007.

Also, last year Phoenix was the recipient of $36.7 million in federal stimulus funds some of which went to the Phoenix police department. [3] Mayor Phil Gordon even urged the city council to approve creating a team of city employees and elected officials to lobby for more stimulus grants. [4]

This on top of the $400,000 the city spends annually to finance lobbyists to secure funding for the city from federal agencies.

If Phoenix is experiencing budget woes, they would not only continue to cut spending but would halt undertaking expenditures like ASU campus expansion projects nor would the Mayor request to have a team of city employees set aside to lobby for more federal money.

The overall logic behind the city's actions is nothing more than a moral crime. Appealing to Phoenicians using fear, emotion and the morality of self sacrifice, the council, mayor, police and fire union's actions are showing that they consider Phoenicians as tax slaves in order to continue the city government's largese.

The reason for the city's budget problems are not that Phoenicians are taxed too little. It's because, not surprisingly, Phoenix politicians spend too much.

The gall of the unions and politicians making the case for this tax goes to show the contempt they have for the people they claim to serve.

[1] Berry, Jahna. February 15, 2010. Phoenix eyes new campus land buy. Retrieved February 15, 2010. Online at: http://www.azcentral.com/arizonarepublic/news/articles/2010/02/15/20100215asu-phoenix-downtown0215.html

[2[ Wong, Scott. March 5, 2009. Needing cash, Valley cities hike taxes, fees. Retrieved February 15, 2010. Online at: http://www.azcentral.com/news/articles/2009/03/31/20090331cityhike0331.html

[3] Author unknown. Date unknown. Phoenix Recovery. Retrieved February 18, 2010. Online at: http://www.ci.phoenix.az.us/citygovernment/recovery/index.html

[4] Wong, Scott. March 3, 2009. Phoenix pushes for bigger cut of stimulus. Retrieved February 15, 2010. Online at: http://www.azcentral.com/business/articles/2009/03/03/20090303stim-striketeam0303-CP.html