This content was originally published by the Longmont Observer and is licensed under a Creative Commons license.
Sarah Levison sat down with the Longmont Observer to talk about Untax Food.
Untax Food is a citizen's initiative, to get a question on the ballot in November, to repeal taxes from food purchased in a store that will later be prepared at home. This would not include items that are prepared by a grocer such as deli items, pre-cooked chicken or food prepared in restaurants.
The ballot language states:
Honorable Mayor and City Council: We the undersigned registered voters of the City of Longmont seek to repeal taxes on groceries; to be enacted by January 1st 2019. The City Council may adopt this measure; or refer the measure to the ballot to be considered by the voters of Longmont.
The proposed language, shown below, amending the Longmont Municipal Code will exempt food purchased for preparation and human consumption from city sales tax within the city limits of Longmont.
To be added to Longmont city code section 4.04.090. - Sales tax—Exempt items designated. Food purchased for preparation and human consumption by consumers in locations other than provided in 4.04.080(E) For this subsection, "food" shall have the same meaning as provided in 7 USC 2012 Chapter 51(k)
Currently, food purchased with food stamps is the only food that is tax exempt in Longmont. If this initiative makes it to the ballot and then if it is voted for by the residents of Longmont, it would "define food the same way the U.S. Government defines food for food stamps," says Levison. "So basically, this would exempt not only someone on food stamps but everyone in town."
Levison is a former Longmont City Councilmember. During her time on council, she worked on projects such as the Rise Anti-poverty Program and Summer Meal Program. The latter program "was started without a lot of money from the city. It was really money that I discovered was being untapped from the federal government," says Levison.
"I've been working on issues of income inequality and food insecurity for a number of years. And I’ve realized that we’ve got a lot of people with the rising rents and costs of living that are getting squeezed on food. And the one way that I figured out that we could help the majority of the people in Longmont in a positive way would be to repeal the tax on basic groceries, things like strawberries and eggs and carrots."
Sarah Levison and Paul Tiger teamed up to begin the citizen's initiative to untax food.
"I have known Paul Tiger for a number of years. We have a common interest in open and transparent government. We have also had ongoing conversations about taxation and what our government taxes do."
Levison and Tiger began collecting signatures for a petition to get the initiative on the November ballot on June 30, 2018. They have 21 days to collect 5,672 signatures of Longmont registered voters. That number is 10% of the number of people who were registered to vote on Election Day for the last city election. The last signature for this initiative can be collected at 11:59 p.m. on July 20th.
"We are all volunteers, we put our heart and soul into this, we would like the residents of Longmont to sign the petition. We can’t have a conversation, this is the rule, unless we get on the ballot," says Levison.
Why is it important that the tax on food change?
"It’s a regressive form of tax, because people that are lower income and have income constraints, eat at home 66% of the time. They’re spending more than 15% of their income on food. That comes from that article from the USDA. Frankly, there are a lot of people that the first thing that gets cut is food. There are many people that have food insecurity in our town. Many of us don’t. However, having an extra couple of bucks in their pocket as opposed in the city’s pocket would allow people to purchase additional food, pay for their medicine, their utilities, their rent," states Levison.
Levison and Tiger supplied several articles, each supporting why they believe Untax Food is important to have on the November ballot. The article Levison referenced from the USDA was actually an article from the Bureau of Labor Stastics and can be found here.
This article shows data taken in 2015 concerning the average amounts of money spent on food in the home and food out of the home (purchased in restaurants) for five income levels.
According to the Bureau of Labor Statics article, "In general, the share of total income spent on food was higher for lower income households than it was for higher income households. Those with earnings in the lowest 20 percent of income spent an average of 15.4 percent of their income on food. Households with incomes in the middle 20 percent spent 12.6 percent of income on food. Households in the highest 20 percent of income spent 11.2 percent of their income on food."
The USDA article that Levison mentions can be found here. This article describes the impacts on the lowest income quintile (the poorest 20 percent of households) as they "spend less money on food than higher income households, but this accounts for a greater share of their income."
According to the Boulder County TRENDS Report, "The need for food assistance is partly driven by the recent spike in home prices and rents. The latter has amped up pressure on lower income families."
The Boulder County TRENDS Report (p. 54) gives the following information via a chart. The TRENDS Report credits its source of this information as American Community Survey, 5-year data.
FAMILIES WITH CHILDREN UNDER THE POVERTY LEVEL, 2015
Superior 1%
Erie 2%
Louisville 4%
Boulder 9%
Lafayette 9%
Longmont 17%
Levison pointed out that after reading this report, she learned that Longmont has the highest rate of people under the poverty level in Boulder County.
Levison and Tiger sought out answers from the City of Longmont. They wanted to know how much revenue was gained by the tax on food and where that money was allocated in the city's budget. The current sales tax on all goods is 3.53% in Longmont.
They contacted the City of Longmont's Chief Financial Officer, Jim Golden, for the tax information. After receiving data from Golden, they worked with Jim Ruff, volunteer data analyzer, to analyze the data.
According to Levison, "Jim Ruff’s numbers were made from information he received from Jim Golden. For example: I think the national number on how many dollars of food revenue could actually be fresh food groceries is about 66%. Golden gave Ruff that number and that is the number Ruff used as his control."
The number 66% was updated to be 64%. Here is the data that Ruff assumed from the numbers given to him by Golden.
According to Levison, it is difficult to get a firm grasp of the exact numbers that the city receives from unprepared food, because all food bought in the grocery store or at a restaurant is taxed the same. In addition, non-food items such as paper towels are also taxed the same.
"When King Soopers sends the check to Longmont, they tax everything. They are not required to do an audit and say, oh this amount of the tax was for lettuce and this amount of tax was for paper towels or light bulbs or prepared food. So Jim Golden’s assumptions are his best guess. Simply by getting this on the ballot we will actually begin getting some better conversations about what happens with tax money and the impact of removing taxes," says Levison.
Has this been done before?
"When we began doing research we found that many of the largest cities in the state do not have a sales tax on food: Denver, Aurora, Colorado Springs, Lakewood and Littleton," states Levison.
"Littleton repealed theirs by citizen’s initiative. Lakewood had a citizen’s initiative as well. The city council ultimately repealed it, but it was due to the citizen activism. Thirty some other small cities also don’t tax food, some rural communities, like Burlington, Palisades that have a limited option for places to buy groceries. In Fort Collins, their tax on food is more than a percentage point lower than the percentage on other sales tax items. Even cities like Fort Collins recognize that food is an essential and that we should remove barriers from people being able to feed themselves."
Levison also referenced the following articles about the state of Arkansas. These articles include information about how the reduction of taxes on groceries increased Arkansas' "per capita personal income from 48th to 44th in the U.S." in the years surrounding 2009.
Levison's Thoughts
"The heart of it is that it’s an unfair tax. It burdens people who frankly, our government services are supposed to help provide some self-sufficiency for. And instead we are taking money out of their pocket and they are paying much more in taxes to get those government services. So that’s really unfair. And that really goes to the heart of what we know to be income inequality in this city," says Levison.
Levison shared a receipt from a recent trip to a Longmont grocer. Her bill included items such as: trail mix, pasta, cereal, broccoli, bananas, cherries, apricots, asparagus, strawberries and carrots. All the items on the receipt were food items that could be prepared at home. Her total came to $50.51. The sales tax on that bill was $1.78.
Levison mentions that cities are always concerned with a loss of revenue. However she states, "While that $1.78 may not go into the pocket of the city, it’s going to go into the pocket of the consumer who is maybe going to go ahead and buy some toilet paper or shampoo or go out to eat because they have a little extra money in their pocket or if they are a lower income family or a senior they will be able to pay for their medicine or school supplies for their kids or clothing."
Levison argues that the money that people save from the tax on food could be used to help them with their other monetary responsibilities. She believes, "that there is a large group of people in Longmont who would rather that we have people empowered to be self-sufficient," and that untaxing food is an easy way for the City of Longmont to do that.
"That money doesn’t disappear, it goes right back into the economy. People will have the dignity of being able to go to the supermarket where you see people in the community. If you’re going to the food bank, there is still some stigma, and you do not have a choice. You can choose from what is there or you can not choose. If you’re on a special diet there’s usually not a lot of gluten free, salt free, reduced salt, and then the very people we blame for unhealthy choices may not have access to the food that they need. They know what their doctor has told them. So what would be their choice? They have none. This would give people a choice."
Levison's View on Recent Suggested Alternatives
At the Longmont City Council meeting on July 10, Councilmember Aren Rodriguuez said that he, "wants to direct staff to provide information in an option rebate program concerning sales tax on food."
Levison's reply is, "In some states that have some sales tax on food, they have a rebate program also, that you do it through income tax filing and people who are too poor to file state income tax may not know about it. A lot of them don’t, so they don’t access it."
"What would be the value of the city starting another bureaucracy? You have to put on the clock the minute someone starts working on this. How many staff hours was that, hiring someone, doing the marketing? If you look at the Boulder County Trends report, it’s pretty startling what they say is self-sufficiency for a family of 4 in Boulder County. Much above what the top range is to qualify for Food Stamps. So even if you qualify for food stamps, in those states that have the rebate programs, you’re still able to get a check even though you are not paying sales tax on food stamps purchases.
I don’t think that the council needs to spend a lot of time designing a new government program, setting a limit, and then testing that limit and knowing almost off the bat that people that really need this tax break are not going to get it.
And if it’s enormously successful, they’re going to cut back on it because, again, this becomes a dollar in the council’s pocket as opposed to a dollar in the pocket of the person that needs it to pay their rent, to buy their medicine, to buy their kids school clothes, to buy clothing for themselves, to pay their utility bill and to survive in Longmont."
Next Steps
Levison, Tiger, and their group of volunteers will continue to ask registered voters to sign their petition until the last minute.
Levison encourages voters to get out and sign the petition. Also, to look at the city's budget, the newest budget should be available in the upcoming months. "Try to follow what is in the city budget. Look line by line like the city council members are asked to do. See where you can find a million dollars to cut."
Community Comments
The Longmont Observer asked members of the community for their opinion on Untax Food. The following are the responses.
Devon Smith: I'd like to see alcohol, cigarettes, and processed food taxed heavily and fruits, vegetables, meats, dairy, eggs etc (real food) not taxed at all.
Renee Melocco: In Weld county, all non-prepared food is tax free. I loved it when I lived there.
Ruth Stemler: Food should be tax free. My son is a 32 year old machinist, working 48 hours a week. Taxes like food tax hurt the lower income the most!
Kristen Elizabeth Linden: The government taxes every part of our lives. If we work, we pay tax, if we own a home or a car, we are taxed. If we want to buy goods and services which contributes to the economy, we are taxed and if we eat we are taxed. Enough is enough.
Rachel Frojen Parrinello: Go out in the community and ask people who don't have access to smart phones/internet/social media how this directly affects their life.
Sally Petrovick: Won't make a difference to me personally.
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