What’s on your ballot: Prop 316 would limit Arizona cities’ ability to increase grocery taxes

This November, Proposition 316 will give Arizona voters a chance to limit cities’ ability to increase taxes on groceries.

Prop 316 is a legislative referendum that would prevent cities and local governments from increasing sales taxes on groceries without voter approval and cap the tax at 2%, regardless of voter approval.

The measure defines groceries as “food items intended for human consumption” and would apply to take-home food and drink items. It also includes seeds and plants that could be used in gardens to produce anything edible.

Prop 316 is retroactive to Jan. 1, 2025. If it passes, cities and towns that had a 2% or higher sales tax on groceries before Jan. 1, 2025, would be able to keep their rates the same. However, jurisdictions that increased their grocery tax above 2% after that date would need to lower them to meet the new cap.

What are the arguments for Prop 316?

Supporters of Prop 316 believe groceries are essential items that shouldn’t be subject to taxes. Republican state Rep. Leo Biasiucci originally introduced the measure in over a year ago as House Concurrent Resolution 2021 in a form that would have eliminated the grocery tax altogether.

“Do you think it’s right that we’re taxing milk and eggs and bread? … I don’t know a single voter or constituent who’s going to say, ‘Yes, continue to tax me on these things that I have to put on the table for my family,’” Biasiucci said during a House Ways & Means Committee hearing in February 2025.

The measure was eventually amended and passed with bipartisan support after cities pushed back on completely losing the grocery tax revenue stream, which is used for critical projects and staff.

Chandler Mayor Kevin Hartke supports the amended proposition and believes it strikes the right balance.

Hartke told KTAR News 92.3 FM that Prop 316 is a compromise that “gives some sensitivity to consumers and taxes” while still allowing cities to generate revenue.

What are the arguments against Prop 316?

Some, however, worry about what the measure would mean for cities that rely on sales tax revenue for essential services such as schools, roads and public safety.

“Cities depend on sales taxes; particularly rural cities and towns depend on sales taxes for a significant part of their budget, and their hands are tied in terms of what other revenue they collect,” said Cathy Sigmon, co-director of Civic Engagement Beyond Voting, a nonpartisan political group based in the Valley.

Sigmon believes that when deciding on the issue, it’s important to look at the big picture.

“I think everybody loves to get a tax cut, but they also want all the benefits and services that they depend on in their communities,” she said.

Sigmon said it’s easy to see this as a one-off measure to control consumer costs, but that is not the case. She said it is the latest in a long list of tax breaks that are starting to add up. For example, state lawmakers cut into cities’ revenue base by banning taxes on rent starting in 2025.

“It is part of an overall system that just needs to be addressed,” Sigmon said. “And unfortunately, we’re in a position where chipping away at absolutely every level of taxation is creating a tremendous system of not being able to afford the services and needs of every Arizonan.”

What will Arizona voters see about Prop 316 on their ballots?

Here is the official ballot language for Prop 316:

OFFICIAL TITLE: AMENDING TITLE 42, CHAPTER 6, ARTICLE 1, SECTION 42-6015, ARIZONA REVISED STATUTES.

DESCRIPTIVE TITLE: RETROACTIVELY PROHIBITS LOCAL GOVERNMENTS FROM ADOPTING OR INCREASING A TAX ON GROCERIES WITHOUT VOTER APPROVAL AND SETS A MAXIMUM RATE OF 2%.

A “yes” vote shall have the effect of: (1) retroactively prohibiting local governments from adopting or increasing a tax on groceries from July 1, 2025, through June 30, 2027; and (2) after that time, prohibiting local governments from adopting or increasing a tax on groceries without voter approval and limiting any new or increased tax to a maximum rate of 2%.

A “no” vote shall have the effect of maintaining the current laws relating to local government taxation.

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