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Group to put grocery tax petition on hold

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Contributed by: Charley Able on 4/28/2008

A grassroots group will put its petition drive on hold after Mayor Bob Murphy promised to fix what could be a fatal flaw in a proposal to repeal the city's 2-percent tax on groceries in the hands of its opponents.

"The proposed ordinance contained an escape clause that would restore the grocery tax - which burdens those who can least afford it - if it is found to be 'invalid or unenforceable,'" said Natalie Menten, who for nearly two years has worked to end the tax.

Menten and others met with Murphy April 28 in an effort to persuade the city to drop the clause.

The proposed ordinance, which will be heard by city council in May, originally failed to specify who will determine whether it would stand.

Unlike other ordinances considered by council over the past two decades, the proposed grocery tax-repeal ordinance would fall if any of its provisions fail.

The city's ordinances routinely carry a severance clause that allows the ordinance to stand if one or more provisions fail.

This ordinance was compiled by the city after an 11-member panel appointed by Mayor Bob Murphy voted unanimously to recommend the tax be repealed.

"The city administration resorted to half-truths, outright falsehoods and demonstrated a lack of respect for at least one committee member in an effort to keep this proposal away from council," said Menten "But Mayor Murphy has taken the high road and promised to strengthen the proposed ordinance."

Former City Councilwoman Dorothy Wisecarver, who has been battling the grocery tax along with Menten , said Murphy's decision will result in council consideration of an ordinance that is fair to both local businesses and the citizens.
"Now they have set in motion plan that would level the playing field for other grocers in the city and provide a measure of relief for those citizens who struggle to meet rapidly increasing food prices," Wisecarver said. "City council's approval of the revised ordinance would be a statement of their support for those council serves."

The provision in question would replace the grocery-tax income with an ordinance exempting two of the city's largest retailers - Colorado Mills and Wal-Mart at Creekside - from paying the 1-percent tax increase approved by voters in 2005. That exemption, although approved before the tax increase went to voters, was not part of the ballot question.

Wal-Mart currently pays the city a flat $1 million in lieu of sales tax, although it collects and pockets a 2 percent tax on all items, including food. The Rocky Mountain News has estimated the retail giant - which pays no state tax on its profits - sells more than $150 million in retail goods at the Creekside store.

"That means Wal-Mart collects more than $3 million in sales taxes, but pockets two-thirds of it," said former Ward 1 City Council candidate Charley Able. "In view of the fact that Wal-Mart is using a loophole to escape state taxes, why on Earth wouldn't we end a $2 million tax windfall and remove the burden that single-parent families, the poor and struggling seniors shoulder through a grocery tax?"

Belmar also received the benefit of the 2005 sales-tax exemption, but city staff took it upon themselves to shield that shopping center from collecting the tax other local retailers must collect when the proposed ordinance was drafted.

"All we are asking for is an ordinance that will stand on its merit, not fall on the wishes of a tax-paid bureaucrat," Menten said.

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