City officials look to phase out Phoenix food tax - KLTV.com-Tyler, Longview, Jacksonville, Texas | ETX News

City officials look to phase out Phoenix food tax

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PHOENIX (CBS5) -

A trip to the grocery store may soon cost a little less for Phoenix shoppers.

City leaders are considering a plan that would cut the city's food tax in half, then get rid of it entirely by March 2015.

The food tax has been around since 2010, when the Phoenix City Council passed a 2 percent food tax to help offset a $277 million budget shortfall.

"Yes, they should get rid of it," said shopper Anita Legares. "Every little bit helps." 

With the economy bouncing back, there's been a lot of pressure on city leaders to eliminate the food tax before it expires in 2015.

But concerns over the city's budget and impact on police and fire positions kept that from happening.

Phoenix Mayor Greg Stanton told CBS 5 News that the city manager has come up with a plan to reduce the food tax to 1 cent on every dollar without affecting major city services.

"The majority of the council said, 'if we can eliminate it without reducing public safety or core city services, then we should do that,'" said Stanton. "That's what people demand."

City Councilman Sal DiCiccio has been leading the charge to eliminate the food tax.

In fact, he was against it from the beginning.

DiCiccio said the public was misled into believing that money from the food tax would save jobs.

"The public was not told the truth when this food tax went through," said DiCiccio. "It was literally sold as a way to protect police and fire. Now we know that's not true - $137 million was doled out in pay raises, and it was wrong."

Cutting the Phoenix food tax in half is expected to reduce city revenue by $33.4 million over the next 15 months.

Stanton said they can absorb that loss by refinancing around $19 million in debt, selling surplus property, and using $10 million in property tax that's set aside for potential lawsuits.

The city council is expected to vote on the new food tax plan in October.

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved

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