LovelandPolitics
| Loveland's Independent News Source |
Loveland, February 18, 2015
Despite every council candidate in the 2013 Loveland City Council election promising a
repeal of the city's unusually high grocery sales tax, Loveland's City Council rejected such a
motion offered by Councilman Troy Krenning Tuesday night.
Loveland Mayor Cecil Gutierrez along with City Manager Bill Cahill, both opponents of the
repeal, set the Loveland City Council meeting agenda. For years both Cahill and Gutierrez
have refused to allow a vote on the tax claiming insufficient financial information to
forecast the impact on city revenue among other excuses. This has allowed a number of
councilors allied with Mayor Gutierrez to continue claiming they support the repeal they
campaigned on while never facing a vote to demonstrate their commitment.
Tuesday night any speculation regarding their positions came to a sudden and unexpected
end as they were forced to cast a vote. A frustrated Councilman Troy Krenning offered a
motion to put such an appeal of Loveland's 3% grocery tax in motion receiving immediate
support from Councilmen Dave Clark and Hugh McKean who both seconded Krenning's
motion in unison. The motion failed 4-3 with Mayor Gutierrez and Council members Joan
Shaffer, Ralph Trenary and Phil Farley voting to retain Loveland's 3% sales tax on all
grocery items.
Among the reasons stated for their vote against the motion was Cahill's argument the item
was not on the council's meeting agenda. While those voting against the repeal repeated
Cahill's process and agenda complaints they also agreed to entertain a study session of the
matter.
Loveland's Grocery Sales Tax
Loveland is among the few cities in the State of Colorado that levies a full sales tax on
groceries while most either exempt groceries from their sales taxes altogether or collect a
lesser portion of their sales tax on grocery items. The State of Colorado and Larimer County
specifically ask retailers across the state to segregate food for exemption from sales taxes.
Loveland shoppers can see on their receipts that non-food items are taxed at 6.55% like
most consumer goods purchased within city limits (3% City of Loveland, 0.65% Larimer
County, 2.9% State of Colorado). However, food items are segregated for a sales tax of only
3% as both the State of Colorado and Larimer County exempt unprepared food from
taxation. Loveland City Manager Bill Cahill has long argued the city doesn't know what
revenue it receives from food versus non-food items thus cannot accurately project the
potential loss to the city's budget.
Curiously, members of the city council have repeated Cahill's assertions even claiming it
would be too much of a burden on city super markets to ask them to make such a change in
how they charge sales taxes. Apparently, a majority of Loveland's City Council is unaware
of the fact food items are already segregated for exclusive City of Loveland taxation in every
grocery receipt.
Advocates for the poor generally oppose taxing food since it is a regressive tax (meaning it
impacts the poorest the most) thus reducing the amount of food they can afford to buy for
their families on a limited budget. Wealthy people don't necessarily consume more food so
the impact as a percent of their income is de minimis.
Earlier in the same meeting Loveland's City Council was considering yet another business
incentive for a grocery retailer to come to Loveland by waiving certain fees to be "repaid"
by the future purchases of the market's customers through the grocery sales tax.
March 24 Study Session
Councilman Krenning has not given-up and is exploiting his colleague's promises to permit
a "study session" discussion of the item. According to city policy, if any four members of
the council request an item to be placed on an agenda the staff is required to place the item
in the upcoming meeting agenda.
At right (see email chain) Councilman Trenary is continuing his effort to suffocate any effort
to repeal the grocery tax through ongoing procedural objections. Councilman John Fogle,
who did not attend last Tuesday's meeting thus was unable to vote, is the fourth member of
the city council expressing a desire to have staff provide the council with an actionable
resolution and ordinance to vote on repealing the tax.
Despite every council candidate in the 2013 Loveland City Council election promising a
repeal of the city's unusually high grocery sales tax, Loveland's City Council rejected such a
motion offered by Councilman Troy Krenning Tuesday night.
Loveland Mayor Cecil Gutierrez along with City Manager Bill Cahill, both opponents of the
repeal, set the Loveland City Council meeting agenda. For years both Cahill and Gutierrez
have refused to allow a vote on the tax claiming insufficient financial information to
forecast the impact on city revenue among other excuses. This has allowed a number of
councilors allied with Mayor Gutierrez to continue claiming they support the repeal they
campaigned on while never facing a vote to demonstrate their commitment.
Tuesday night any speculation regarding their positions came to a sudden and unexpected
end as they were forced to cast a vote. A frustrated Councilman Troy Krenning offered a
motion to put such an appeal of Loveland's 3% grocery tax in motion receiving immediate
support from Councilmen Dave Clark and Hugh McKean who both seconded Krenning's
motion in unison. The motion failed 4-3 with Mayor Gutierrez and Council members Joan
Shaffer, Ralph Trenary and Phil Farley voting to retain Loveland's 3% sales tax on all
grocery items.
Among the reasons stated for their vote against the motion was Cahill's argument the item
was not on the council's meeting agenda. While those voting against the repeal repeated
Cahill's process and agenda complaints they also agreed to entertain a study session of the
matter.
Loveland's Grocery Sales Tax
Loveland is among the few cities in the State of Colorado that levies a full sales tax on
groceries while most either exempt groceries from their sales taxes altogether or collect a
lesser portion of their sales tax on grocery items. The State of Colorado and Larimer County
specifically ask retailers across the state to segregate food for exemption from sales taxes.
Loveland shoppers can see on their receipts that non-food items are taxed at 6.55% like
most consumer goods purchased within city limits (3% City of Loveland, 0.65% Larimer
County, 2.9% State of Colorado). However, food items are segregated for a sales tax of only
3% as both the State of Colorado and Larimer County exempt unprepared food from
taxation. Loveland City Manager Bill Cahill has long argued the city doesn't know what
revenue it receives from food versus non-food items thus cannot accurately project the
potential loss to the city's budget.
Curiously, members of the city council have repeated Cahill's assertions even claiming it
would be too much of a burden on city super markets to ask them to make such a change in
how they charge sales taxes. Apparently, a majority of Loveland's City Council is unaware
of the fact food items are already segregated for exclusive City of Loveland taxation in every
grocery receipt.
Advocates for the poor generally oppose taxing food since it is a regressive tax (meaning it
impacts the poorest the most) thus reducing the amount of food they can afford to buy for
their families on a limited budget. Wealthy people don't necessarily consume more food so
the impact as a percent of their income is de minimis.
Earlier in the same meeting Loveland's City Council was considering yet another business
incentive for a grocery retailer to come to Loveland by waiving certain fees to be "repaid"
by the future purchases of the market's customers through the grocery sales tax.
March 24 Study Session
Councilman Krenning has not given-up and is exploiting his colleague's promises to permit
a "study session" discussion of the item. According to city policy, if any four members of
the council request an item to be placed on an agenda the staff is required to place the item
in the upcoming meeting agenda.
At right (see email chain) Councilman Trenary is continuing his effort to suffocate any effort
to repeal the grocery tax through ongoing procedural objections. Councilman John Fogle,
who did not attend last Tuesday's meeting thus was unable to vote, is the fourth member of
the city council expressing a desire to have staff provide the council with an actionable
resolution and ordinance to vote on repealing the tax.
| Loveland's Council Rejects Repeal of City's Grocery Sales Tax |
| From: Ward I - Troy Krenning <Troy. Krenning@cityofloveland.org> Date: February 18, 2015 at 10:30:20 PM MST To: Ward II - Joan Shaffer <Joan. Shaffer@cityofloveland.org> Cc: Ward IV - Ralph Trenary <Ralph. Trenary@cityofloveland.org>, Ward III - John Fogle <John.Fogle@cityofloveland.org>, Tami Yellico <Tami. Yellico@cityofloveland.org>, City Council <CCouncil@cityofloveland.org>, Temp CCMAIL <TEMPCC@cityofloveland.org> Subject: Re: grocery sales tax Joan, You have been on Council for over five years and the only thing you have done toward reducing or eliminating the tax on food is talk about it, generally around election time. The City Manager has said numerous times that the risk might be an approximate loss in revenue of $7m. I underscore might. Since I doubt most people who save 3% on bread and milk will run to the local savings and loan and open a passbook savings account, it may very well be that the 3% goes right back in the stream of commerce. In other words, we could see a bump in the purchase of non-grocery items of which we will still collect our 3% ante. There is a concept known as "disposable income", it suggests that people spend what they don't need for fixed, reoccurring expenses. We (you) gave Sprouts $2.2m a few weeks ago and last night several were giddy over a $6m slush in rollover that we wanted to blow on another grocery store incentive. At what point does the madness stop? Have you ever said no to a spending request? Ever said no to a budget rollover? Instead of pretending like we need more information and hiding behind what the "impacts" might be to our citizens, why don't you chose to lead instead of being led? Here is a very predictable "impact"; the cost of groceries will go down by 3% to the people paying the taxes and buying food in Loveland. Let's call it an incentive, we cherish those. An incentive to the citizens to keep more of their money and spend it on things that matter to them and their families, instead of the City hoarding their cash. It may be tough but I'm willing to bet that if we really had to, the council could find the necessary decreases in spending to more than make up for a $7m reduction in a $225m budget. But of course Council, those you have sat on for five years, have never made reductions, instead you just go along with the annual increases. Last year myself and at least two others questioned all the new budget plus ups. The Mayor thinks it is because members missed study sessions. I don't speak for others but my questioning was more centered on why. Why do we need these new things and positions? We agonize over the cost of housing and living in Loveland, all the while, showing NO restraint in spending tax dollars for feel good projects. I'm tired of the charade that is played by you and others acting like you are an advocate for citizens. Just put the item up for a vote and vote no. It's easy enough, you had no pause doing so last night. Lastly, speaking about good and fair information being presented to our citizens. Do you call the scripted Sprouts night of reconsideration a few weeks ago to be good and fair? Is that the idea of public input that you seek? And as for civil manner, your non-sensical rant about some quote you misread ( yes, misread I had a dear neighbor being me the article, outraged by your rehearsed anger) in the newspaper and suggestion that I owed you an apology, is that the civil manner you are hoping for? Troy Sent from my iPhone On Feb 18, 2015, at 7:59 PM, Ward II - Joan Shaffer <Joan.Shaffer@cityofloveland.org> wrote: Dear Ralph, I agree, and consider Councilor Krenning's push for a resolution on abolishing the grocery sales tax to be presented at the March 3 council meeting to be both reckless and inane. We, as councilors, don't know what that impact could mean for our citizens, nor have we provided them with facts, implications, risks or benefits for our community well being. Hell, we can't even get a commitment from all of us to attend a special half day meeting to begin our 2016 budget review, one that we asked for! We are seated at the dais to insure good and fair information be presented and appropriate opportunities for public discussion occurs. Such process allows us to fairly represent our community's interests. We largely agreed, last night, that we begin deeply exploring the grocery tax issue at our March 24 study session, pushing aside a long-planned, and clamored for, exploration of our capital expansion fee (CEFs) program. That being the result of the "magical" four plus preference, I plan, and intend, to focus on our conducting city business in an orderly and civil manner. Thank you, Joan Joan Shaffer Loveland City Councilor, Ward II Sent on a Samsung Galaxy S®4 -------- Original message -------- From: Ward IV - Ralph Trenary Date:02/18/2015 5:49 PM (GMT-07:00) To: Ward I - Troy Krenning ,Ward III - John Fogle Cc: Tami Yellico ,City Council ,Temp CCMAIL Subject: Re: grocery sales tax Council, This Resolution needs to wait until after the March 24 Study Session. It is premature, and even reckless, to bring it to the March 3, Regular Meeting. This would be a waste of staff time. We are less than 24-hours out from consensus that a thorough examination of the issue was needed. We selected the March 24 Study Session for that important work. Acting to erase that so quickly via email is unacceptable. A first reading vote on March 3 leads to a second reading on March 17. This circumvents last night's agreement and makes the professed urgency for the Study Session irrelevant. Many of us, possibly including those absent last night, have more to discuss, ideas on this proposal to share and questions that deserve full consideration at the Study Session. Since the dais motion last night failed, and did not even gain four votes (rule of 4), there is no Council directive to bring this Resolution. The next presentation on this issue should appropriately occur on March 24. Sincerely, Ralph Trenary City Councilor - Ward 4 Loveland, Colorado Ralph.Trenary@cityofloveland.org 970-213-9224 cell/v-mail/text Facebook - Ralph Trenary – City Councilor, Loveland, Colorado CONFIDENTIALITY NOTICE: The information contained in this e-mail is privileged and confidential, and is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are notified that any disclosure, copying, distribution, electronic storage or use of this communication is prohibited. If you received this communication in error, please notify us immediately by e-mail, attaching the original message, and delete the original message from your computer and any network to which your computer is connected. From: Ward I - Troy Krenning Sent: Wednesday, February 18, 2015 16:21 To: Ward III - John Fogle Cc: Tami Yellico; City Council; Temp CCMAIL Subject: Re: grocery sales tax Tami, Please bring a proper resolution to the next meeting. I would like to introduce it and bring a vote on the issue. Since my motion was improper lets do it right. City Council has been talking about eliminating the grocery tax for years, no better time than the present to put words into action. Cslr Fogle is 100% right, we should adhere to processes and not forego the significance of second readings and such. Thank you, Troy Sent from my iPhone On Feb 18, 2015, at 4:06 PM, Ward III - John Fogle <John.Fogle@cityofloveland.org> wrote: Tami -- Am I understanding this to mean that these sort of changes can't be made without prior public notice, due public comment time and two readings? John Fogle City Council -- Ward III From: Tami Yellico Sent: Wednesday, February 18, 2015 1:19 PM To: City Council Subject: grocery sales tax Mayor & City Council, As you know, at last night’s City Council meeting there was a vote with regard to the elimination of grocery sales tax. If the motion had passed, we would have considered it as direction to staff to prepare the necessary ordinance for Council consideration. If and when City Council decides to eliminate grocery sales tax that action will have to be taken by ordinance, because the City’s sales tax code provisions will have to amended. This is also appropriate because proper notice of the issue will be given and there will be an opportunity for public comment on the ordinance. Thank you, Tami Tami Yellico City Attorney City of Loveland 500 East Third Street Loveland, CO 80537 970.962.2541 |
| Loveland City Council Emails following the meeting |