Palo Alto moves to place employee-count tax on November ballot | Town Square | Palo Alto Online |

Town Square

Post a New Topic

Palo Alto moves to place employee-count tax on November ballot

Original post made on Jan 27, 2020

Emboldened by recent survey results and examples from neighboring cities, Palo Alto's elected leaders agreed Monday to place a business tax based on employee count on the November ballot.

Read the full story here Web Link posted Monday, January 27, 2020, 10:45 PM

Comments (32)

44 people like this
Posted by Voting no
a resident of Greater Miranda
on Jan 27, 2020 at 11:39 pm

The city is running massive surpluses yet it is planning to have yet another tax? I know how I am voting.


42 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jan 28, 2020 at 6:11 am

It's way past time to start taxing businesses instead of pushing ALL of the costs of business growth onto residents. Hardly surprised by the accusations that the survey was "deceitful"; it's a PA specialty as per the city-funded survey on the ballot initiative proposal to curb office growth.

OF course the Silicon Valley Leadership Group opposes the tax; shifting the tax away from business and unto residents is its main lobbying purpose. That's why it pays its "leaders" such huge bucks.


24 people like this
Posted by NTIMBY
a resident of Mountain View
on Jan 28, 2020 at 6:40 am

PA Weekly might want to clarify that MV didn't create a new tax, it modernized its business license fees (which hadn't changed since 1954 see: Web Link )

Reaction from the SVLG is not surprising, their motto seems to be "No Tax In My (corporate) BackYard". Sounds like two Council Members also adopted that motto.


35 people like this
Posted by Anon
a resident of Evergreen Park
on Jan 28, 2020 at 8:19 am

Go big on taxing big business, finally !
As a poster above mentions its about time!
Council members Tanaka and kniss don’t support residents at all, never gave never will.

Don’t be fooled again and re-electTanaka;he worried last night that our unfriendly policies towards business
Has already driven out companies and this will
Make it worse!
What, has he not heard about our jobs housing imbalance ? Does he not know that we have the highest jobs housing imbalance of the very jobs heavy west bay?
An imbalance worse than San Francisco?

Completely clueless Absurd statements ! Vote no on Tanaka 2020


30 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jan 28, 2020 at 8:41 am

Small businesses, restaurants, true retail, are all struggling particularly with minimum wage laws. It is not a good idea to put extra taxes on any small business because it just might be the last straw.

As it is, we are losing useful retail, table service restaurants and service providers. We should be encouraging businesses that serve residents to remain in Palo Alto.


48 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Jan 28, 2020 at 9:18 am

If the tax applies to small retail businesses, then, I will vote no. The tax needs to apply to businesses that are cramming software developers into 25 square feet.


20 people like this
Posted by Disgusting
a resident of Green Acres
on Jan 28, 2020 at 9:42 am

I’m very disturbed by the process. Since when is it okay for the city to lie about things to get us to vote for new taxes. Sad


24 people like this
Posted by Don't You Just Love Your City Leaders?
a resident of Crescent Park
on Jan 28, 2020 at 10:00 am

from the Weekly...

"On Monday night, the council began to wrestle with two thornier questions: What should the tax look like? And how should the money be spent?"

The City of Palo Alto = always looking for newer (and oftentimes wasteful)ways of spending money.

Another tax = another Christmas shopping spree for the city.


35 people like this
Posted by Rick
a resident of Adobe-Meadow
on Jan 28, 2020 at 11:09 am

Time for the adults in this town to take back our quality of life. Voters - please deny Tanaka and the other developer-centric council members reelection.

Council members: Please take up a motion to relieve Shikada of his position and hire a City Manager who is responsive to -our- needs.

Thank you.


21 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jan 28, 2020 at 11:12 am

According to another report, there's no exemption for small business which will weaken support for the much-needed tax. Shame on the City Council for yet another end-run around what the residents vs big business and their lobbyists want.


11 people like this
Posted by Gus L.
a resident of Barron Park
on Jan 28, 2020 at 11:49 am

READ MY LIPS, No New TAXES!!
Stop It..


14 people like this
Posted by Annette
a resident of College Terrace
on Jan 28, 2020 at 1:38 pm

I agree w/Kniss that the tax should be specific and w/Anon that small businesses should be exempt. Only those voters who happen to have a PA business will pay this tax directly; the rest are somewhat insulated and that can make it painless to vote yes whether the tax is general or specific. A specific tax is fair in that it assures businesses that the money they are paying out is being spent on infrastructure projects that are directly tied to business impact. When leases are up for renewal, business owners will understandably assess if leasing space here continues to be a value proposition. If revenue from this tax is spent on projects that improve key factors for their employees, that will inform the renew/cancel debate in a positive way. Transportation and housing are the key issues now and that is likely to remain true for at least a couple more decades. Is there a sunset clause on this tax?


5 people like this
Posted by Novelera
a resident of Midtown
on Jan 28, 2020 at 2:05 pm

Unclear how much the per employee tax would be. If per employee amount is not a big number, then how is this so onerous for small retail businesses. Many commenters above want them exempt. But, if really small retail, they'd perhaps have 10 or less employees. The Big Tech companies that have a lot of employees would seem to be the target group to pay their fair share of the impacts on our city by their headquartering their businesses in Palo Alto.


8 people like this
Posted by chris
a resident of University South
on Jan 28, 2020 at 2:27 pm

Annette,

Before you lock into your ideas, understand the following:

1) A specific tax will lock the city into an inflexible position while the budget needs will vary widely over time. It will force the city to move money around in ways that subvert your intent anyway. Also, specific is not a well-defined concept.
Transportation is vague enough; housing is even more amorphous. You might as well pass a general tax. We all know what the city needs and there is a city council election every 2 years where you exercise your opinion.

2) Most businesses in Palo Alto are small businesses. You would ask a few businesses to either pay very high fees and not raise much money.. Everybody should have skin in the game. Big businesses will pay the most by far because they have the most employees anyway.

3) A sunset clause is silly. Shouldn't businesses always be contributing to the city's needs? PA without a business tax is an anomaly. If needs drastically change, the council can vote to change it. If the tax were to sunset at an inappropriate time, the renewal of the tax would become a huge political distraction when other issues are much more important.




22 people like this
Posted by mjh
a resident of College Terrace
on Jan 28, 2020 at 2:34 pm

A representative from the Silicon Valley Leadership group spoke and claimed how much businesses contribute to the city. However, when Prop 13 passed property tax revenues were divided approximately equally between residential and commercial properties Today commercial properties contribute only 25% of our property tax revenue, downward trajectory that will continue year on year. Because there are loopholes baked into Prop 13 which allow changes in ownership of commercial properties to be structured in a way that does not trigger new property tax assessments.

I don't imagine many residents are aware just how relatively small the percentage of property taxes paid by most owners of all that Palo Alto office space they lease is. How the burden of property taxes is increasingly falling to residents while most commercial property owners are laughing all the way to the bank.


30 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Jan 28, 2020 at 2:39 pm

This tax is long overdue, but it must exempt small businesses and target big tech.


10 people like this
Posted by Not sure I can vote for this, but maybe that's why some Council members pushed for this.
a resident of Another Palo Alto neighborhood
on Jan 28, 2020 at 6:14 pm

The tax should pay for grade separation planning/construction and supporting transit in Palo Alto. Both of these would serve businesses who are creating the monstrous increase in demand for transportation options. The number of residents simply hasn't changed that much. It is business growth that is driving current traffic problems and demand for trains and other transit. (And the lazy habit of picking our car keys every time we leave the house.) Growing companies should pay their fair share to mitigate the impacts of their growth. I would vote for a special tax, not a general tax. A general tax can be spent willy nilly on whatever. I want the revenue spending limited to these two needs. Our need for transit service will not diminish over time.

When sea level rise becomes a problem, people will still need to get around. The amount of money we are talking about here cannot fund a levee system or mitigate flooding issues of that scale. A city of our size will need federal support to fund that mitigation. Let's be careful who we vote for in Washington.


27 people like this
Posted by Rich
a resident of Downtown North
on Jan 28, 2020 at 8:08 pm

If Silicon Valley Leadership Group thinks a business tax is bad, then it's almost guaranteed to be good for residents. Remember, SVLG is paid by the largest and wealthiest businesses in Silicon Valley to do what ever is necessary to make sure that those wealthy companies pay as little as possible, preferably nothing, to mitigate the housing and transportation problem they largely created.


13 people like this
Posted by Barb
a resident of Charleston Meadows
on Jan 28, 2020 at 8:33 pm

Spend Tax Payer Money on Keeping the roads safe: Campers parked for 3 weeks on El Camino South Palo Alto, yesterday a boy on a bike was almost hit by a car biking on El Camino between Los Robles. Since Jan 3, 2020 the same trailers and campers have been parked in the same location. A bike, car, etc. cannot see pulling out of side streets onto El Camino Real.
White Trailer - Huge in size: CA License# 1LE7251; Another white trailer dropped-off: CA License# 1KP5337; Beige camper: CA License 8MWY400; Beige camper: CA License# 8EHE522. With all the schools in the area, kids on bikes not safe, VTA and Stanford buses use 2 lanes to get around the campers parked on El Camino. Worse when you add the huge trucks that do the same.


4 people like this
Posted by Decker Walker
a resident of Stanford
on Jan 28, 2020 at 9:57 pm

So, we tax based on the number of employees. How do we expect businesses to respond?
+ Hire fewer employees, thus fewer jobs, less employment, reduced tax revenue for local communities, more homeless.
+ Outsource to companies headquartered elsewhere with employees who will actually work in Palo Alto, though not be legally employed there.
+Replace employees with contract workers hired for specific short term assignments, without benefits.
Will this make Palo Alto and the Peninsula a better place to live?


21 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jan 28, 2020 at 10:50 pm

Two suggestions:

1) Larger companies can pay progressively more, so tax them that way. The first employee is free, second employee gets the base rate, next employee is taxed at, say, 101% of the base rate, the next at 101% of that, and so on. At about 70 employees the rate has doubled, at 110 it has tripled, quadrupled at 140, etc. Small business get a break; large businesses with the big impacts get the bite.

2) Be very definite and clear about what the tax will be spent on.


9 people like this
Posted by Fewer employees?
a resident of College Terrace
on Jan 28, 2020 at 11:41 pm

"Hire fewer employees, thus fewer jobs, less employment"

We have a 3/1 jobs housing imbalance.

" reduced tax revenue for local communities"

A few less people buying lunch? Not that big of a deal.


10 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jan 29, 2020 at 8:27 am

It is so easy to "hide" or lower the number of employees. Call them contract workers, temporary workers, seasonal workers, sub-contracts, casual workers, even lay workers off for a week (the week they are counted) and rehire with no loss of rights.

I approve of a business tax on large companies, I don't approve of headcounts. There are better ways to do this.

I also believe that a business tax should be specific for transportation. I don't see how a business tax could be used for housing unless the City is going into the housing/renting or providing cheap loans or housing subsidies to those who work in town business.


6 people like this
Posted by Annette
a resident of College Terrace
on Jan 29, 2020 at 8:34 am

@Chris - thank you for your comments on my comment; good things to think about.


17 people like this
Posted by Marie
a resident of Midtown
on Jan 29, 2020 at 10:32 am

I favor an employee based tax, higher with more employees and low for small businesses. Not only should businesses have to pay their fair share of transportation improvements, I believe this is the only way to really know how many businesses and employees are actually in Palo Alto. All measurements of the job/resident ratio are estimates.

What ever happened to the business registry, which would have produced real data on employee patterns of transportation etc? Has the city administration continued to fail to follow the city council's direction to get companies to comply with the registry, which is a minimal cost to businesses?

Perhaps if the city administration sees the potential of increased income to cover increased administration expenses, they will put in the effort to find out just how many employees are in Palo Alto.

Please focus on actual headcount, not estimates based on salary expense, and be sure to include onsite contractors.


10 people like this
Posted by I can't vote for this.
a resident of Another Palo Alto neighborhood
on Jan 30, 2020 at 2:02 pm

I would have preferred a special tax with focus on grade separation and transportation projects that support alternatives to driving, like transit, bike lanes, etc.

I won't vote for a general tax. I'm voting no, and I feel like they missed a great opportunity. Very disappointing.


10 people like this
Posted by Annette
a resident of College Terrace
on Jan 30, 2020 at 9:08 pm

Hoping "Chris" will chime in on general tax v specific tax. The focus of this tax now is transportation infrastructure. The promise of improving that will be the bait to get people to vote yes. But there's nothing but ethics requiring CC to spend the money on transportation. Unless the tax is specific, the revenue could be spent on anything, including paying down the unfunded pension liability, and *they* are free to come back again for yet another tax for infrastructure projects. And if the revenue from this tax isn't dedicated to transportation infrastructure, the need for a tax for that will continue to exist. Round and round and around we'll go.

I think a headcount tax makes the most sense but I continue to think it needs to be specific. Sad to say, relying on the word of CC isn't the way to go on this one. One need only look at CC's reversal on the downtown garage or the deeply flawed PC public benefit issue to see the perils inherent in relying on the City's word. This tax is meant to offset the impact that businesses have on the community, it is being sought specifically to improve transportation, and I think it would be a mistake to not make it specific to that. I think businesses should contribute to impact mitigation, but also think it important to bind the city to spending the money on the issue it is being raised for.

Others see this differently; I will read the comments with interest.


9 people like this
Posted by common sense
a resident of Midtown
on Jan 31, 2020 at 10:31 pm

Money is fungible. City Council/City Manager can easily say any new tax is paying for transportation, when that money should have already been allocated from existing budget funds.

And just because money spent on transportation doesn't mean it's being spent wisely; look at the road furniture on Ross Rd.

If they have a business tax, it should be on square footage - too many games can be played with employee head count (part time workers, contractors, etc). Much harder to play games with the square footage a company owns or rents. Start at $10/sq ft, and provide an exemption for retail.


17 people like this
Posted by Nayeli
a resident of Midtown
on Jan 31, 2020 at 11:10 pm

Vote NO on taxes to small businesses (including sole proprietors).
Vote NO on taxes to retail or restaurants.

In fact, I'd rather not create a tax that doesn't have a specific purpose.

I have no problem of imposing a tax to the large companies that employ non-residents who have made traffic into and out of Palo Alto a nightmare. It now often takes longer to get from Alma Street (via Oregon Expressway/Page Mill) to 101 or 280 than it does to get from the exits to Redwood City or Santa Clara.


11 people like this
Posted by Annette
a resident of College Terrace
on Feb 1, 2020 at 9:31 am

"Voters also indicated that they aren't completely sold on the idea of a general tax, which has a lower threshold for passage and gives the council a wide latitude on how to spend the funds. More slanted toward a special tax, which dedicates funding to specific projects and requires a two-thirds majority for passage. While the margin was relatively small (43% supported the former while 46% the latter), FM3 determined that, after responders heard messages advocating for each type of tax, support for a special tax rose by 8%."

So, 54% of survey respondents (that's US!) tilt SPECIFIC and CC tilts GENERAL. Huh? Is CC concerned support will not rise to the 2/3 level?

If I were a PA business owner I would welcome this CC decision b/c I would be thinking that it will be easier to launch a campaign against a general tax. Why, for instance, should any business pay OUR pension costs?

On the other hand, it's harder to argue that businesses, especially the large commercial enterprises that have hundreds of employees commuting here, shouldn't contribute to housing and transportation improvements such as grade separation and a reliable shuttle service.

If the vote were held tomorrow I would vote NO.


2 people like this
Posted by Transportation spending
a resident of Professorville
on Feb 4, 2020 at 3:33 pm

Common sense writes
>And just because money spent on transportation doesn't mean it's being spent wisely; look at the road furniture on Ross Rd.>

And those foolish bollards on Middlefield north of Embarcadero. Never have seen anyone use them, (are they for bikes??) they just make right-turns hazardous.


Like this comment
Posted by Anon
a resident of Another Palo Alto neighborhood
on Feb 8, 2020 at 3:29 pm

Posted by Nayeli, a resident of Midtown

>> Vote NO on taxes to small businesses (including sole proprietors).
>> Vote NO on taxes to retail or restaurants.

Most people seem to agree with this, but, I haven't seen specifics from the CC. I wish they would clarify this ASAP. We need to tax large employers that have blocks of non-creative work that can easily be moved out of here.

>> I have no problem of imposing a tax to the large companies that employ non-residents who have made traffic into and out of Palo Alto a nightmare. It now often takes longer to get from Alma Street (via Oregon Expressway/Page Mill) to 101 or 280 than it does to get from the exits to Redwood City or Santa Clara.

Yes, I would like to see the details of the small business exemption ASAP. It will be the key to getting widespread support for a new tax. Without that exemption, I will vote NO. We need to investigate all possible ways to get big companies to move unnecessary "bulk" that doesn't have to be here out of Palo Alto and off the Peninsula.


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Email:


Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: * Not sure?

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields


Stay up to date on local coronavirus coverage with our daily news digest email.

Food Safety and Coronavirus: A Comprehensive Guide
By Laura Stec | 11 comments | 28,621 views

These local restaurants are donating meals to Bay Area residents in need. Here's how to help.
By Elena Kadvany | 6 comments | 10,622 views

Coronavirus: Plan ahead now for a big outbreak
By Diana Diamond | 16 comments | 3,697 views

Will the Coronavirus Save Lives?
By Sherry Listgarten | 27 comments | 3,560 views

How COVID-19 Affects Communities
By Jessica Zang | 3 comments | 909 views

 

DEADLINE EXTENDED

The 34th Annual Palo Alto Weekly Short Story Contest is now accepting entries for Adult, Young Adult and Teen categories. Send us your short story (2,500 words or less) and entry form by April 10, 2020. First, Second and Third Place prizes awarded in each category. Sponsored by Kepler's Books, Linden Tree Books and Bell's Books.

Contest Details