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Grocery tax committee has done a great service

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Contributed by: Mayor Bob Murphy on 5/5/2008

On Monday, May 12, the Lakewood City Council will consider an ordinance that will eliminate our existing 2 percent sales tax on grocery food items. This would be the culmination of an effort the council initiated the evening they took their oath of office in November2007. At that time, Mayor Bob Murphy announced the formation of an ad hoc committee of seven Lakewood citizens to research all aspects of the issue, and report their findings and recommendations back to city council.

The committee was chaired by Ward 4 businessman and former Lakewood Planning Commission Chairman Bill Marino. Through their research, we learned a number of facts about the issue. Nearly 80 percent of Colorado cities tax grocery food items, and Lakewood's 2 percent tax rate was among the lowest in the Metro area. The amount of revenue received by the city from this tax was determined to be more than $4 million per year.

While members of the committee were concerned about the fundamental fairness of a tax on groceries, they also recognized that a loss of revenue of that magnitude would significantly impact city services. They began searching for an additional revenue stream that could partially offset this loss.

Their solution was to ask city council to rescind the waiver of the 1percent sales tax at two development areas in Lakewood: Colorado Mills and Creekside. This waiver was approved by the voters as part of the $0.01 sales tax increase in 2005. Approximately $3 million in additional revenue would be realized. When coupled with their recommended repeal of the sales tax on grocery food items, the net loss of revenue to the city would be reduced to $1 million.

Subsequent to the committee beginning their work, several Lakewood citizens began circulating a petition to remove the grocery food tax. An accredited petition would likely result in the matter being placed on the ballot in November at an additional cost of over $150,000 to Lakewood taxpayers.

The committee's "Great Compromise" helps us achieve many goals at once. We can eliminate a tax many feel is regressive, and certainly impacts those who can least afford it during these difficult economic times. Yet, we can accomplish this without a drastic reduction in city revenues and services. We save our citizens both the cost of an election and the community divisiveness that can come with it.

I sincerely thank the committee members: Chair Bill Marino, Vice Chair Ramey Johnson, Frank Lay, Barbara Coria, Jon Ludwigson, LaDawn Capek-Sperling and Natalie Menten, who along with non-committee member Charley Able helped move this issue forward.

This is a city council that wants to unite the community, not divide it. The Mayor's Ad Hoc Committee on Grocery Food Tax has done our entire city a great service.

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Showing 1-4 of 4 comments

Submitted By: Erin Feese

posted on 5/7/2008 @ 11:58:58 AM

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Thanks Natalie!

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Submitted By: Natalie Menten

posted on 5/6/2008 @ 7:00:38 PM

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Also, it should be mentioned that though the Mayor stated 80% of the cities tax food, many offer grocery tax rebates to their citizens. In Boulder the rebate is $66 per resident, $199 for a family. In Loveland, $70 each resident, Durango $50. Some rebates are open to any resident and some depend on age or income. No matter which, a rebate program is inefficient compared to just getting rid of a regressive tax.

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Submitted By: Natalie Menten

posted on 5/6/2008 @ 6:38:09 PM

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Right now, we pay 2.5% sales tax on food for home consumption and 7.6% on all other foods. The difference is mostly about whether someone prepared the food for you to eat right there. Examples- loaf of bread 2.5% pound of salami 2.5% lettuce 2.5% mayo 2.5% Salami Sub from Joe's Sandwiches 7.6% The definitions of food can get a bit trickier. Water is always taxed at 7.6% but juice is taxed at 2.5%. Some prepared foods which are really meant for home consumption will still be taxed at 7.6%. Summed up, the Lakewood grocery tax repeal will eliminate the 2% tax (not the .5% though) and any food currently taxed at 7.6% will remain the same.

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Submitted By: michael obeirne

posted on 5/5/2008 @ 10:30:35 PM

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I'm not clear. Will food taxes be removed across the board? Upon what food related items will taxes remain?

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Showing 1-4 of 4 comments

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