WSLP: City has feasted on food tax long enough

Mike Robuck

MONTROSE -- The Western Slope Libertarian Party is spearheading an effort to repeal the city's sales tax on food.

A repeal of the tax would save money for the poor and those on fixed incomes, but would cost the city one of its main revenue streams. Cutting the tax could also lead to the cutback or elimination of some city services.

The city's 3 percent sales tax on food purchased for home consumption applies to groceries purchased in stores, but not food items purchased at restaurants. The WSLP contends the tax is a hardship for lower income and fixed-income residents.

"We understand that the city needs revenue, but we don't think it's fair that they get it from taxing people's groceries," said Tim Jacobs, a Montrose Libertarian. "The smaller the income, the bigger percentage of it goes towards groceries. In a $7 an hour town, that tax is a substantial part of poor people's incomes."

Eliminating the food tax would cut the city's sales tax revenue by nearly one-fourth, Mayor Noelle Hagan said.

"The results are very preliminary, but we found that 23 percent of our sales tax revenue does come from the food tax," Hagan said. "To me, it comes down to do you like the level of services that the city provides? I can guarantee that some of the services will go away if we lose those funds. With the funds, we've been able to do some extra things in our community that other communities our size have had trouble doing."

Residents and Libertarians have roughly 300 signatures on a petition to eliminate the sales tax on groceries, Jacobs said. They'll need about 450 signatures to get the petition before city council.

"We didn't get the petition until a week after the last election," said Jo-Jo Ping, chairwoman of the Western Slope Libertarian Party. "We have February as our own target date, but we have 180 days after getting the petition to get the signatures.

"Our position is that there are several ways for the city to save money instead of spending money all of the time," Ping said. "Taxing food puts the poor and elderly at a disadvantage."

Should the petition garner enough signatures, it would then be up to the city clerk to verify the signatures and ensure everyone who signed it lives within city limits. Once the city clerk has verified the petition, the council can pass it or call for a special election to determine the outcome.

"If the petition passes, the city would lose $2.5 million in sales tax from one year, based upon our 2001 and 2002 sales tax information," Assistant City Manager June Chandler said. "If that were to happen, it would appear that we would have to cut some services, but I don't know how much or what services."

Money raised by the sales tax on food goes into the city's general fund, which covers a number of services in Montrose, including the police department and most of the Montrose Pavilion, Hagan said. Since Montrose doesn't have a city property tax it depends heavily on the sales tax on food. The staff at City Hall has looked into the potential impact of losing the sales tax revenue.

Jacobs and Ping both said the city needs to develop alternatives to cutting services, namely cutting the budget.

"Our position is that there are several ways to save money instead of spending it all of the time," Ping said. "There are certain places in the budget where they are overspending."

This isn't the first time there's been a movement to repeal the sales tax on food. In 1982, a petition, which at the time also included a tax on fuel, came up for a vote in a special election, but the measure was soundly defeated 1,321 to 263.

The tax first took effect in 1964.

BACK