Council: Business tax could fund housing, transportation | April 29, 2022 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - April 29, 2022

Council: Business tax could fund housing, transportation

Revenue options for contentious measure also likely to include public safety and downtown improvements

by Gennady Sheyner

If Palo Alto voters approve a new business tax in November, affordable housing and transportation improvements will likely absorb a large share of the revenues that the city collects, the City Council agreed on Monday.

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Email Staff Writer Gennady Sheyner at [email protected]


Posted by tmp
a resident of Downtown North
on Apr 26, 2022 at 10:50 am

tmp is a registered user.

It is imperative that the City of Palo Alto should have a business tax. It is time for these huge money making corporations to contribute to the area that has provided them with so much. They should stop whining and get on board with helping to improve transportation, infrastructure, provide for the police and fire that protect them and add to the community that they base their businesses in. They are the ones with all of the money and they should pay their fair share.

Palo Alto is the last city in the bay are that doesn't have a business tax and we need to get it done now. We are faced with difficult issues that need work and funds to fix and it is time for everyone to contribute.

Posted by Local Resident
a resident of Duveneck/St. Francis
on Apr 26, 2022 at 11:09 am

Local Resident is a registered user.

The property tax exemption has allowed businesses to get away with paying a smaller and smaller portion of the cities taxes over many decades. This tax is one almost every other city on the peninsula already has.

Housing costs are so high and commuting so bad that employees are leaving the bay area in droves and yet businesses fight vigorously against contributing to the solution? The businesses (or more correctly land owners renting to businesses) are too short-term focused. Like a virus that kills the host. However, if businesses leave Palo Alto then we can build more multi-family apartments so its not all bad.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Apr 26, 2022 at 11:18 am

Online Name is a registered user.

Shocked that business lobbyists prefer to pay nothing after so successfully shifting the costs from them to us, the residents. How nice struggling hotels like the one that replaced The President Hotel and evicted 85 long-time low-income PA residents are rewarded with exemptions WHILE we get to fund NEW affordable downtown housing.

I get nervous when I see the phrase "transportation improvements" which means spending millions on traffic diets, traffic calming and more gridlock when we're being forced to absorb hundreds of thousands of new people. Sustainability matters. Ignore the drought; new people never use water.

I see nothing about using the money to restore lost city services like the full hours for the libraries. Instead, we're getting this city-supported proposal this to legalize the practice of "over-charging" us on top of the latest utility rate increases.

"In a separate 6-1 vote, with Tanaka dissenting, the council also signaled support for a second measure that would reaffirm the city's historic practice of transferring funds from the gas utility. The city suspended the transfers in the last budget because of a legal challenge from resident Miriam Green and a court finding that the transfers constitute an illegal tax. By getting the voters' endorsement, the city hopes to overcome this legal setback and restore the roughly $7 million gap in the general fund that the court decision created."

Posted by Bystander
a resident of Another Palo Alto neighborhood
on Apr 26, 2022 at 12:27 pm

Bystander is a registered user.

Transportation improvements? What an efficient couple of words to describe almost anything. There are things we do not need, but there are many things we do need.

We do need the return and improvement of the Shuttle.

There are many intersections that need to be upgraded considerably for pedestrian/bike/vehicle safety. e.g. Loma Verde/Middlefield and Embarcadero at T& C.

We need to have electronic signs at our garages (promised for a long time), we need parking to be easy to navigate and we need to be able to pay for parking on our phones.

We need park and ride lots at highway offramps with shuttles to business destinations.

We need shuttles to serve our schools but ones that others can use also.

How's that for starters?

Posted by Novelera
a resident of Midtown
on Apr 26, 2022 at 3:25 pm

Novelera is a registered user.

Big surprise. Businesses don't want to be taxed. For smaller businesses, the amount will be minimal.

Not at all surprised to find Tanaka, running for Congress, opposing a tax benefiting the town that he hopes won't matter to him any more. And doubtless hoping to get some business contributions for his campaign.

Posted by Annette
a resident of College Terrace
on Apr 26, 2022 at 4:09 pm

Annette is a registered user.

These two issues are vexing. Palo Alto should have a business tax; should have had one for years now. But what's being proposed is a general tax. Even if this CC has a resolution to use the funds for specific purposes, that can be undone by a future CC. A specific tax is harder to pass, but at least it assures that, if passed, the revenue is spent on the intended purpose of the tax. Second problem: the last word from the Court on the utility transfer was that the practice was illegal. Now the City is asking residents to make legal what was deemed, in Court, to be illegal. Semantics matter. Call it a new utility tax and see if residents approve it for what it is.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Apr 26, 2022 at 6:39 pm

Online Name is a registered user.

"Now the City is asking residents to make legal what was deemed, in Court, to be illegal. Semantics matter. Call it a new utility tax and see if residents approve it for what it is."

Annette, hah! Totally unlikely since our cost-conscious "leaders" are spending OUR tax dollars on outside consultants to shape the language for the 2 ballot propositions so we'll be most likely to approve the taxes. As per Monday's CC meeting, they're starting their 3d round of polling.

Calling it a Utility Tax is as likely as having CPAU Mission statements containing language like "cost-effective" and "efficient" and "current outage reporting" ...

Posted by Jeremy Erman
a resident of Midtown
on Apr 26, 2022 at 11:57 pm

Jeremy Erman is a registered user.

Restoring services cut during the pandemic, and providing an ongoing reliable means of supporting them, should be the #1 purpose of this tax. The pandemic showed that the City relied too heavily on the TOT (aka the "hotel tax"), and that other sources of funding are needed.

Once the City's current programs are restored and stabilized, then the Council can start looking at other things to spend money on.

Posted by JH
a resident of Midtown
on Apr 29, 2022 at 4:12 pm

JH is a registered user.

Rather than a business tax, the City should consider increasing the real estate transfer tax. Residents are the ones who will benefit from the funding, so residents are the ones who should pay.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Apr 30, 2022 at 12:33 pm

Online Name is a registered user.

@JH, businesses own property, too, and "live" longer so they rarely end up paying the property transfer tax. As for residents benefiting, track how the tax burdens have shifted from businesses to residents after the last few pro-business city managers and the pro-development city councils under Mayors Kniss and Fine.

Watch the city's Bait & Switch re putting up both the "Business" tax and the Utility Tranfer tax to legitimize the continued practice of overcharging us $20,000,000 each and every year AND to get out of paying US the legal settlement the judge ordered. For this they've hired both a political consultant AND a new SENIOR utility staffer to fine-tune the ballot language to make the Utility Transfer tax the most palatable AND letting businesses off the hook even though PA is the ONLY city without a business tax.

So please remind me again how the residents benefit when there's NOTHING about restoring services to residents for full library services, animal services and/or to demand decent performance from city employees like cops, the "Planning" Dept re its many fiascos including Casti, the Town & Country "retail/medical" conversion, the parking permit fiascos, the failure to track power outages, the solar permitting fiasco WHILE they spend a fortune preaching be-green conversion....

Posted by Annette
a resident of College Terrace
on May 2, 2022 at 6:59 am

Annette is a registered user.

Quite possible: both ballot measures pass and the General Fund swells, but the city still needs money for services, grade separation remains a discussion item, affordable housing remains an oxymoron, the City Manager's staff increases, the unfunded pension obligation decreases a little, and some not critical capital projects are approved. These measures do not obligate the City to use the funds for the purposes spoken of in the campaign to get them both passed.

Posted by JH
a resident of Midtown
on May 2, 2022 at 10:42 am

JH is a registered user.

The average salary and benefit package for City employees is more than $243,000. That's ludicrously high --- more than double the Area Median Income. Employee salaries and benefits are responsible for more than 40% of the City's operating expenses. If the City Council were fiscally responsible, the Councilmembers wouldd slash the salary package and the number of employees and spend the budget surplus on the CIP --- no tax increases needed.

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