City Council approves 2 percent food tax, public hearings scheduled

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PHOENIX -- It looks like shoppers in Phoenix will be paying more for their groceries in a couple of months.

The City Council, as expected, approved a 2 percent sales tax on basic food items during a special meeting Tuesday. The move is an effort to close the city's $241 million budget deficit.

The tax, which amounts to $2 for every $100 worth of food purchased at grocery stores and other retailers, would kick in on April 1, and would close the deficit through June 2011. The plan is for it to sunset after five years.

The council could, however, reverse it decision based on input from a series of public meetings scheduled for later this month.

Items purchased with food stamps would be exempt from the tax.

Supporters of the tax, including Mayor Phil Gordon, say it will generate an additional $50 million for the police department, fire department, parks and other city services that are currently on the chopping block.

Opponents say it will hurt the poor and those on fixed incomes.

Phoenix shoppers did used to pay a tax on milk, vegetables and other foodstuffs. Voters pressured the council to repeal that tax in the early 1980s, making Phoenix one of about 20 Arizona municipalities that does not collect a tax on food.

The expected 2 percent food tax is the same as the city's current sales tax rate.

While the food tax is expected to be approved, the vote will not be unanimous.

"This tax is wrong," said Councilman Sal DiCiccio. "It's the wrong direction for the city of Phoenix. It's not fair to burden the poor, the seniors and the working class -- when they're struggling -- with a tax this size."

The meeting is scheduled for 2 p.m.

In addition to the food tax, city leaders are looking at deep cuts in dozens of agencies, including layoffs in the police and fire departments, to close the budget gap.