Phoenix’s temporary 2% tax on food would be reduced more than a year before automatically expires in April 2015 under a plan proposed by two members of the City Council.
Michael Nowakowski and Thelda Williams last week asked city manager David Cavazos to develop a fiscal 2014 budget based on cutting the tax rate to 1% in January 2014. The remaining 1% would remain until the scheduled sunset of April 1, 2015.
Nowakowski and Williams said the city manager should be prepared to discuss the budget plan at the May 1 council meeting. Williams said the city should be able to reduce expenditures by $25 million through more efficient operations and the sale of surplus properties.
The food tax was adopted in 2010 as the Arizona capital faced a record $277 million revenue shortfall in fiscal 2011.
Mayor Greg Stanton said in 2011 that the tax should be repealed by April 2013, but switched in March when Cavazos warned that the early demise would threaten vital city services. The resulting $55 million revenue drop would require the layoffs of 99 police officers and 300 municipal employees, Cavazos said.
Stanton remains opposed to any tax cuts that “hurt public safety or essential community services,” said Ruben Alonzo, the mayor’s deputy chief of staff.
Public safety, park and transit receives 40% of the revenues from the food tax, with 60% going into the general fund.