Aspen food-tax refund to increase to $55
December 13, 2017
Aspen residents who annually lick their chops for the city's food tax refund will have more cash to drool over in 2018.
The City Council agreed to raise the payout to $55 during a public discussion on the local perk Tuesday, with plans to make it official through the passage of an ordinance early next year.
The City Council compromised on hiking the amount from $50, which has been in place since 1998. Council members Ann Mullins and Bert Myrin lobbied for a $60 refund, given that the current amount has been stagnant for nearly two decades. Mayor Steve Skadron and Councilman Ward Hauenstein said they were satisfied with leaving it the way it is. Councilman Adam Frisch suggested $55.
"I think it's more sound financial management to increase it more often at a less steep rate," Frisch said.
Residents who lived Aspen for the entire 2017, including their dependents, will be eligible for next year's refunds.
Finance Director Don Taylor brought the issue to City Council to get direction on how to proceed with the tax, which the city introduced in 1970. The refund amount at the time was $7, with the idea behind it that Aspen, which is a home-rule city, did not exempt food from sales taxes unlike the state and cities that aren't home ruled.
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Aspen also raised its sales tax by 1 percent that year, and "The city decided to leave the sales tax on food in place and then refund a fixed amount per person that lived in the city for the entire preceding year. In that way, it was still able to collect sales tax on the food purchases of visitors, which is the majority of the food purchased in the city, and offset the impact to residents by making the refund," according to memo from Taylor to the City Council.
The city currently doles out $170,000 in food tax refunds, Taylor said, noting that it's a "very difficult program to administer."
Taylor's staff is charged with reviewing some 4,000 food-tax applications from residents — the U.S. Census estimates Aspen's population was 6,871 in July 2016 — who must demonstrate they have lived in city limits for the entire prior year.
"Ninety percent are correct and good people doing what they're supposed to do, 90 percent plus," Taylor said. "But it's that 5 to 10 percent (who) drive you crazy, trying to stick it to the man to get 50 bucks. People apply from Red Mountain (which is not in city limits), people apply for deceased partners, people that don't meet the requirements, people that live downvalley."
The administrative hassles associated with the food tax refund prompted Taylor to suggest that perhaps the money could be repurposed for another community benefit, "something the community felt good about that they would invest their $50 in," he said.
Requiring food-tax recipients to provide their voter registration could simplify the process, Frisch said. City Attorney Jim True, however, cautioned that would raise some legal flags, while Taylor said some residents don't register to vote to avoid a jury summons.
And, said Assistant City Manager Sara Ott, "You have residents that are not U.S. citizens that would not be eligible."
The City Council opted to stick with the food-tax refunds, in part because "it's really a goodwill gesture" toward Aspen residents, Mullins said.
Seniors receive an additional $100 refund, while blind residents collect an extra $50. Applications for the 2018 refunds will be available at the beginning of the new year.
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