Grocery tax is well past its expiration date

Guest column by George Teal
Posted 2/20/18

There was a time when our town only had two grocery stores and a handful of gas stations. Before the redevelopment of our downtown core — before the factory outlet — and even before our state …

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Grocery tax is well past its expiration date

Posted

There was a time when our town only had two grocery stores and a handful of gas stations.

Before the redevelopment of our downtown core — before the factory outlet — and even before our state recognized the Taxpayer’s Bill of Rights (TABOR), our town services subsisted on the grocery tax. Because we had nothing else.

We paid for our cops, built our roads, and ran a town government through the direct taxation of the milk and bread that was purchased at those two, small grocery stores.

But we aren’t that small town anymore.

With the addition of the Promenade and continued improvement in the economy, we are seeing our town coffers grow to more than $44 million in sales tax revenue in 2017 alone. In 2016, that number was $39 million.

Yet in spite of a healthy and diversified economy here in town, we continue to incorporate the most regressive sales tax imaginable.

A grocery tax disproportionately hurts low- and fixed-income residents the most.

According to the U.S. Department of Agriculture, in 2014, our lowest-income Americans spent an average of $3,667 on food — amounting to 34.1 percent of their income, while middle-income families spent an average of $5,992 (13.4 percent).

In 2018 numbers, and according to the Economic Policy Institute, an average family of four living in the Denver metro area will spend an annual $9,384 on food.

Now throw a 4 percent grocery tax on top of that.

Using Army veteran math and the (very conservative) $9k estimate, a family with a weekly grocery bill of $195 could be buying two gallons of milk for the price they are paying in tax.

Now consider a hard-working family — living on half that — having to give up the purchase of that (1) weekly gallon of milk because they’ve got to pay that same amount as a tax at checkout.

And because that tax is levied as a flat percentage — regardless of family income — those at the lowest income end up paying a much higher total percentage of their income on a tax that is unavoidable ...

It’s not a luxury tax and it’s not a property tax; it’s a tax that no one can escape because everyone needs food.

In Colorado, our Legislature recognized the regressive nature of taxing a necessity (“necessity” being the operative word) and eliminated the collection of grocery taxes, at the state level, in the 1970s. But they left the option open for local communities and counties to keep that same taxing mechanism. The idea was simple: like pre-1990 Castle Rock, some communities might not have the adequate retail base (and therefore sales tax revenue) to support town services like fire, police, and roads.

But with local sales tax revenues reaching over $44 million — don’t you think it’s time we stopped taxing the one thing we all *need* (food) and offer real and substantial relief to Castle Rock’s hard-working families and seniors, instead?

We no longer need to tax bread and milk. Let’s start having the conversation about how can remove that tax burden from our residents.

It’s the right thing to do.

George Teal is a Castle Rock Town Council member who represents District 6, including Crystal Valley Ranch, Plum Creek, The Lanterns and Heckendorf Ranch.

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