Longmont City Council to Discuss Possible Food Tax Rebate Program
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What: Longmont City Council discussion of possible food-tax rebate program for low-income, elderly or disabled residents.
When: The item is on the agenda of a council meeting that is to start at 7 p.m. Tuesday
Where: Civic Center council chambers, 350 Terry St., Longmont
Further information: The full council agenda, including staff memos for items up for discussion, is available through a link at tinyurl.com/yc52lz9c
Longmont might refund about $100,000 a year to elderly, disabled and low-income residents to offset the 3.53 percent municipal sales tax those people now pay when they buy food from Longmont grocery stores, if the city established a tax rebate program.
That is the estimate in a written report from Jim Golden, the city’s financial officer, that the City Council is to discuss Tuesday night.
At Councilman Aren Rodriguez’s suggestion during a July 10 meeting, the council asked the city staff to prepare a report about the possibility of creating a food tax rebate program in Longmont.
Golden said the staff reviewed rebate programs maintained by Boulder and Arvada. He said those two cities’ programs are similar in that the are directed toward elderly, disabled and low-income residents.
Both cities use U.S. Department of Housing and Urban Development income limits to determine their residents’ eligibility for rebates, Golden reported.
However, the amounts of potential rebates differ between the two cities, as do some of their eligibility standards, Golden reported.
To be eligible for a Boulder refund, the applicant must meet financial eligibility guidelines, must have been a resident of that city for the entire previous calendar year, and must be: age 62 or older the entire previous year; or a person with a disability; or a family with children under age 18 in the household who have lived with the family for the entire previous year.
Boulder, which has a 3.86 percent municipal sales tax rate, processes about 920 rebates annually, refunding about $100,000 to low-income residents meeting the city’s eligibility requirements.
Boulder awards an average $108 amount per rebate recipient, Longmont’s city staff reported, with rebates ranging from $83 for an individual to $253 for a family.
In Arvada, which has a 3.46 percent municipal sales tax, a low-income resident can get a food tax rebate if that person is age 65 or older; or is single and between the age of 55 and 65 and does not share the household with another adult; or is disabled; or is a single head of a household with dependent children.
Longmont’s staff reported that Arvada processes between 1,100 and 1,200 rebates annually and awards about $120,750 a year. The average amount awarded is $105, with rebates of $85 for one person and $50 for each additional person in the household.
Based on the amounts of rebates in Boulder’s and Arvada’s programs, “it is likely that the cost of rebates processed for a similar program in Longmont would be around $1000,000, depending on the program criteria,” Golden wrote, adding that the projected cost of administering the program “would likely be around $20,000.”
The Longmont staff’s report comes as the organization UnTax Food is wrapping up its drive to collect the 5,657 signatures needed to petition an item on November’s ballot that would ask voters for a complete repeal of the city’s sales tax on groceries.
City Clerk Valeria Skitt has said UnTax Food representatives have told her they plan to submit those petitions to her office on Monday, whereupon she can start verifying the voters’ eligibility to sign the petitions and whether enough signatures have been turned in to qualify for this fall’s election ballot.
While the Longmont council has not taken a position on UnTax Food’s tax-repeal initiative, some council members have indicated they also wanted to study a possible rebate program for low-income residents as an alternative to entirely ending the city’s collection of sales tax on grocery purchases.
Projections of the potential budget impact of a complete tax exemption on food have ranged from a $7.2 million reduction in city revenues in 2019 — a figure Golden estimated last month but has said he’s working on updating — to $7.6 million, a calculation earlier this month by Jim Ruff, a Longmont resident who has been analyzing city sales-tax data for UnTax Food.
The city staff did not make a recommendation to Longmont’s council about whether to adopt a local food tax rebate program but is leaving it up to the council to decide whether to direct the staff to draft a rebate ordinance for formal consideration at future meetings.
If the council desires to create such a Longmont program similar to Boulder’s or Arvada’s, it would have to be funded as part of the proposed 2019 city budget the council will be considering this fall.
The city staff is expected to present its overall 2019 proposed budget package to the council in August, followed by discussions at several subsequent meetings in the following months and final adoption in October.
If UnTax Food’s grocery sales-tax repeal proposal makes it onto November’s ballot and is then approved by Longmont voters, the 2019 budget the council adopts before the election would have to be amended to reflect changed appropriations for next year’s city services, programs and projects that get part of their funding from sales taxes.
Contact Staff Writer John Fryar at 303-684-5211 or firstname.lastname@example.org or twitter.com/jfryartc