Phoenix Approves 2-cent Citywide Food Tax

On Feb. 2, the City Council adopted a 2 percent tax on food with a vote of 6-3.  Councilpersons DiCiccio, Gates and Neely were in opposition.  This tax, which will sunset in five years will create annual revenues estimated at approximately $50 million.  By implementing the tax in April, this will bring an estimated $62.5 million in revenue over the next 15 months.  Some will be used to reduce the amount of General Fund cuts to city services and programs, with funds also used to help avoid additional cuts in the Transit 2000, Public Safety, and Parks and Preserves funds.  The high level overview of how the project revenues would be spent is outlined in the table below.

Phoenix is one of only three cities in Maricopa County that does not currently have a tax on food. Every city that borders Phoenix has a tax on food.  This chart shows the current cities in the Phoenix Metropolitan area that have food taxes and their corresponding rates.

The City Council passed the food tax prior to the community budget hearings to give residents the opportunity to provide input.  There will be 15 community budget hearings between February 10th and the 24^th.  Food stamp purchases will not be taxed.  For more detailed information regarding the proposed uses of these projected funds, please see, http://phoenix.gov/budget/foodtaxppt020910.pdf.

Food Tax Allocation Plan - Budget and Research - Presentation