Palo Alto Ballot Issue on Business Tax

Updated 9:30 AM PST, Sun, Nov 1, 2009

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Palo Alto residents will vote Tuesday on whether to establish a business license tax to support basic city services.

Measure A would require businesses located or conducted in Palo Alto to pay a tax to the city. The measure needs a majority to pass.

The tax, estimated to generate nearly $3 million annually in local revenue, would go towards the city's general fund, supporting police and fire protection, senior and youth programs, street repairs, parks and recreation, and library programs.

Under the tax, all businesses would be charged $75 for the first employee.

Personal services, retail, hotel, and wholesale, manufacturing businesses would be charged $34 for each additional employee. Professional, business services, real estate brokerage and non-classified businesses would be charged $95 for each additional employee.

Multi-family landlords, with four or more rental units, would be charged $25.00 for each subsequent residential unit.

Nonprofit organizations, owners of fewer than four rental housing units, and residents who do not operate a business in Palo Alto would be exempt from paying the tax.

Proponents of the ordinance say revenue from the tax could help boost the city's depleted revenue sources and sales taxes, property taxes, and real estate transfer fees brought upon by the economic recession.

They also argue that revenue generated could go towards maintaining libraries, parks and recreation, and city support for schools, as well as addressing the mounting infrastructure backlog.

Opponents of Measure A say the tax will place a burden on small, local businesses by charging than a higher tax per employee rate than big corporations.

They say the tax would also leave small businesses at a competitive disadvantage by charging the highest business license tax in Santa Clara County. Measure A would not mend the city's budget crisis, opponents say.

Elsewhere in the county, Cupertino voters will decide Measure B, which updates the city's utility users tax to continue to fund city services. The measure needs a majority to pass.

Santa Clara Unified School District's Measure C authorizes an annual $138 parcel tax to fund education programs. The measure requires a two-thirds majority to pass.

Measure G, in the Fremont Union High School District, replaces an existing expiring parcel tax with the same annual $98 per year parcel tax to fund education. The measure requires a two-thirds majority to pass.

Bay City News