Sales-tax-rebate programs in some Colorado cities are touted as ways to reimburse local poor people the taxes they paid on groceries. But they also benefit food-stamp recipients whose purchases are tax-free.
Critics say it’s little more than free money to people who don’t pay the tax; others say the objective is to give the poor a break.
Boulder and Fort Collins annually pay tens of thousands of dollars in grocery-tax rebates to qualified poor, elderly and disabled residents whether they receive food stamps or not.
But the rebate available to food- stamp-using residents in cities such as Greeley and Loveland is based on the tax-free groceries they bought the previous year. In some cases, it results in no rebate at all.
Lakewood and Northglenn don’t rebate any grocery taxes collected, while every Aspen resident – rich or poor – is eligible for that city’s rebate. Denver doesn’t tax grocery purchases, so there is no rebate system.
“It’s equitable to disburse to the poor evenly since there’s a misperception that assistance, such as food stamps, covers all expenses and that there are no additional costs,” said Judith Martinez, director of the Family Well-Being Initiative at the Colorado Foundation for Families and Children. “It’s confusing how each city does this. If you live in Greeley and shop in Loveland, how does that get figured?”
Food stamps are a federal entitlement and by law are exempt from sales taxes. A family of four with a monthly gross income less than $2,167 – roughly $26,000 a year – can obtain up to $518 a month in food stamps, according to the Colorado Department of Human Services, which administers the program.
Boulder officials say it’s tough enough living in such an expensive area that it shouldn’t matter if a poor person on food stamps gets the rebate.
“Food stamps don’t provide the complete groceries in a month for a family,” Boulder Councilwoman Robin Bohannan said. “This is just part of a continuum to help everyone adequately.”
In Greeley, though, officials say it’s unfair to give a refund to someone who didn’t pay the tax in the first place.
“Then it’s just free money, not a refund,” said Tena Mose, Greeley’s food-tax-rebate coordinator.
The rebates aren’t huge and vary from city to city, as do the income requirements needed to qualify.
Boulder, which collects about $10 million annually in grocery tax, gives a flat amount: $66 per year for the elderly or disabled and $199 for a family, regardless of size. An individual living alone must make less than $30,450 and be over 61 or disabled. A family of four must make less than $43,500 to qualify.
The rebate in Fort Collins is $40 per year for each person, and single people living alone – it doesn’t matter if they are disabled or elderly – must earn less than $24,200 to qualify.
It’s the same to qualify in Loveland, but the rebate is $70 per person for up to four people in a home, and food stamps are factored in the rebate amount. Likewise in Greeley, though the base rebate is $45 per person.
The same family of four on food stamps – with an annual income of about $26,000 – would get a different rebate from city to city.
In Boulder, the family’s rebate would be $199 per year. In Fort Collins, it would be $160, and in Loveland, it would be $93.52 because of food stamps received.
The family would get no rebate in Greeley and $50 in Aspen, more if any of the adults were blind or over 62.
“It’s easy for people to look at dollar signs and make judgments when, in fact, people are just trying to get along,” said Kitty Melville, a 59-year-old Boulder public-housing resident who says she relies on the rebate. “How can anyone take advantage with $66?”
It’s unclear how many food-stamp recipients get rebates, but if everyone applied, it would mean big dollars. In Boulder, for instance, more than 1,000 households get food stamps, according to the Boulder County Department of Human Services.
Boulder rebated $81,055 last year. Fort Collins distributed $66,360, Loveland doled out $77,886 and Greeley paid $80,189.
Staff writer David Migoya can be reached at 303-954-1506 or dmigoya@denverpost.com.
