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Phoenix city council to vote on reducing food tax

PHOENIX — Phoenix city council members are scheduled to vote this week on reducing the food tax from 2 percent to 1 percent.

In 2010, city leaders said an emergency tax on groceries was needed to make up for a budget shortfall, protect police and fire jobs and preserve after-school programs. The city council thus passed a 2 percent tax on food to run from April 1, 2010 to March 31, 2015.

Critics, including Councilman Sal DiCiccio, have been trying to reduce or eliminate the tax. They said the threat to public safety jobs was overblown and point to raises and bonuses that have been given to various city employees.

If council members approve the reduction when they meet on Wednesday, the tax will drop to 1 percent starting on Jan. 1, 2014, and will completely expire on March 31, 2015. In order to reduce the tax, leaders said they need to make sure there is no negative impact to public safety, no reduction in city services and no negative impact to the city’s AAA bond rating.

According to a city council report, reducing the tax to 1 percent will decrease revenue by $12.1 million in the fiscal year ending in 2014. City leaders estimated the food tax as it stands will generate $54.45 million over that same span.