I read in the Daily Post that you were sent an analysis by Joint Venture Silicon Valley's research group comparing your proposed tax with those in neighboring cities. I am attaching the files JVSV sent me in case you do not have them.
The summary as reported in the Post and as I read the files is that the current proposed tax is way out of line with the burden imposed in most neighboring cities and that the share paid by the largest firms is low in comparison.
This builds on the staff report that 80% of the tax will be paid by others than the top five firms.
I find that the current proposal does not meet equity or competitiveness goals.
Here is what could move me to support a new tax
1) reduce the rate to 60c/ per square foot a year or less. The tax burden for most would still be higher than in neighboring cities.
From the JVSV report
"Even at the lower rate of $.60/SF, companies would pay between 77% (or approximately four times) and 90% (or approximately 10 times) more in Palo Alto than the average tax paid across all five comparison jurisdictions."
2) Exempt all square footage under 25,000. And remove the aggregation of footage for places like Coupa that have completely independent sites in the city
3) Sunset the tax after five years. If it is a good idea without obvious negative impacts, voters will extend it.
4) Improve the business climate. I am sure the Chamber will provide suggestions.
Mine is to allow non retail activities in spaces currently reserved for retail but which have remained vacant for a long time in the face of online shopping and declining offices workers as customers. Work from home is continuing.
I am thinking of service businesses but would also consider office IF higher floors have some housing.
Finally, it is reasonable to expect firms to economize on space in the face of a tax on space particularly when work from home is an option.
Stephen Levy
Center for Continuing Study of the California Economy
