Wrong time to eliminate grocery tax

Those who would want to repeal the 2.25 percent sales tax on groceries in Fort Collins have a compelling argument.
Fundamentally, taxes on food pose an unfair burden on low-income residents: Food purchases constitute a much higher proportion of the household budget for the poor than for middle- and upper-income residents.
Nonetheless, the timing for this grocery tax repeal â?? on the April 5 city election ballot â?? couldnâ??t be worse. And the results would be painful, to put it mildly.
Fort Collins is heavily reliant on sales taxes to support its general-fund budget. With retail sales flattening out in recent years, the city has already been forced to squeeze its budget. Since 2001, the general fund has been cut by $5.9 million.
Currently, grocery taxes supply about $6 million to the general fund, or roughly 10 percent of its revenue stream.
If the tax is repealed, without some other tax to take its place, get ready for cuts in services that will touch everyone â?? most of all the residents who we would presume to be helping with the repeal.
City officials have sketched out budget-cut scenarios that include elimination or reduction of programs such the cityâ??s Human Rights Office, the Affordable Housing Program, the Youth Activity Center and Dial-A-Ride.
The cuts would also eliminate 44 full-time-equivalent jobs with the city.
Another consideration is the impact such cuts would have on the broader economy. Traditionally, the quality of city services â?? including streets maintenance, parks and cultural facilities â?? has been the most effective economic-development tool Fort Collins has at its disposal when businesses decide whether to expand or relocate.
One other consideration is the cityâ??s agreement not to reduce revenues to pay outstanding sales-and-use-tax bonds. If the grocery tax is repealed, city officials expect a legal challenge that â??may take considerable time to resolve,â? according to a memorandum from City Manager Darin Atteberry.
Finally, the city does have a grocery-tax rebate program thatâ??s probably underused.
At a time when the state and federal governments are in severe economic binds, Fort Collins residents shouldnâ??t be in such a hurry to drag themselves into the same scenario.
Fort Collins needs to revisit its tax policy. But any revision requires measured steps. This grocery-tax repeal is a reckless leap