Palo Alto nears decision on November tax to combat traffic

Proposal would create business tax based on employee count

A proposal in Palo Alto to place a tax measure on the November ballot to fund traffic improvements is beginning to stir anxieties in the city's business community, though a new survey suggests that most residents would support it.

The City Council plans to discuss and possibly decide on the potential tax measure on June 27. And while council members generally agree that the city urgently needs a new funding source for alleviating traffic congestion, not everyone is convinced that this year's general election is the best time to do it.

Vice Mayor Greg Scharff, who sits on the council's Local Transportation Funding Committee, is the committee's lead skeptic about a 2016 measure. Over the last two meetings, he has been arguing that the city should instead form a blue-ribbon task force that would evaluate potential transportation projects and then bring the package to the voters in 2017 or 2018.

Others on the committee maintain that the city's traffic situation has already deteriorated and that it's incumbent on the council to do something about it. Waiting two years, their argument goes, would exacerbate the problem even further, while delaying potential solutions.

"This is an urgent problem," Councilwoman Liz Kniss said at the committee's Thursday meeting. "We've talked about this for quite a while now and, as much as housing looms out there, the traffic problem is one we hear about on a constant basis. If there's one thing people like to talk about in town right now, it's how terrible the traffic is right now, how much worse it is, how much worse it's going to get."

For proponents of the tax measures, a recent survey offered plenty of good news, along with some reasons for caution. The new survey, which was conducted by the polling firm Fairbank, Maslin, Maullin, Metz & Associates (FM3), suggests that about 65 percent of the voters would support the type of tax measure currently envisioned by the council -- a business tax based on employee count. Under the current proposal, businesses would have to pay either $50 (if they have between 11 and 50 employees) or $100 (if they have more than 50 employees); businesses with up to 10 employees would be exempted.

Because the measure would be a general tax, it would only need 50 percent support rather than the two-thirds approval that specific taxes require.

Yet the survey also found that of the 65 percent who said they support the measure, only 36 percent said they would "definitely" vote for the measure, while 22 percent said they would probably vote and 8 percent said they were "undecided," but leading toward yes. The survey also suggested that support would drop if there was an organized opposition campaign, particularly if voters become convinced that the council is trying to rush the measure through.

Another factor that will weigh heavily on the council's decision is the transportation measure that is being spearheaded by Santa Clara Valley Transportation Authority (VTA). That measure, a 1/2 cent sales tax increase, is expected to raise $6 billion for a host of regional improvements, including an extension of BART to San Jose, increased bus service, an investment in grade separation along the Caltrain corridor (which would entail submerging the train tracks under crossing streets, or vice versa).

The VTA measure, which would require support from two-thirds of the county's voters, proved popular with Palo Alto voters, with about 75 percent of the respondents to the city's new survey expressing support for it. But after voters learned about the potential local measure, support level for the countywide one dropped to about 69 percent, according to the survey results revealed Thursday.

During the committee's discussion, Scharff made the case for carefully crafting a list of transportation projects and only then asking the voters for a funding source. While he concurred with his colleagues about the need to "do something" to solve the city's worsening traffic problems, he acknowledged that he doesn't know at this time which projects would accomplish this. He also expressed some concern about the possible effect that the local effort could have on the regional one.

"We can lose both this and the VTA tax and I think this would be very, very unfortunate," Scharff said.

While so far, there hasn't been any significant opposition to the proposed tax measure, members of the Palo Alto Chamber of Commerce urged the council on Thursday to proceed with caution. Peter Stone, chair of the Chamber's board of directors, said the group is preparing to officially throw its support behind the VTA tax measure, which he noted took several years to put together.

"Although the polls suggest the effect won't be large, I think it's right for those of us who support the VTA measure to be concerned about the impact," Stone said.

Chamber CEO Judy Kleinberg also said Thursday that her group would be concerned if there was another measure on the ballot that would erode support for the VTA proposal. She also told the council that if it chooses to move ahead with a tax measure, it should include a sunset clause. Without such a clause, Kleinberg said, the measure "almost certainly is going to be opposed."

But Mayor Pat Burt made a case for pursuing the local measure. Unless the council acts in short order to come up with meaningful solutions to the city's traffic problems, the local political climate would make things even more difficult for the business community.

"We've seen that the concern of the community over this issue," Burt said. "If we don't solve the problem, what's going to be the trend line of the political sentiment of the resident community toward the business community and future development? I would posit that it is going to be very different if we don't solve the problem than if we do."

The committee didn't take any formal votes Thursday, though members made some suggestions about the potential measure, should the council ultimately choose to pursue it. If the council opts to move ahead with a general tax in 2016, it would likely supplement it with an ordinance that would specify that the tax revenues would be used for transportation projects.

In a nod to the Chamber's concerns, Councilwoman Karen Holman also suggested that the measure include a sunset clause and proposed that the tax extend to 2028, around the time when the city's soon-to-be-updated Comprehensive Plan will be nearing its expiration date. Holman also said it would be critical to appoint an oversight committee that would monitor expenditures and report to the council. "We'd be foolish and irresponsible if we didn't require that," Holman said.


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6 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jun 17, 2016 at 10:30 am

The proposed $50 or $100 business per worker tax won't even come close to covering the transportation subsidies for workers commuting to Palo Alto via train and carpools planned under the new TMA non-profit.

8 people like this
Posted by sue allen
a resident of Adobe-Meadow
on Jun 17, 2016 at 10:32 am

A non-specific general tax that might be used for transportation fixes, as yet undefined, is not going to fly in Palo Alto.
The only true fix for our transportation woes is to build lots and lots of high-density housing so that people can live near where they work. Palo Alto has been nixing that for the 40 years I've lived here.

18 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 17, 2016 at 11:33 am

My neighbor works at a downtown firm. She has told me that more than 50% of her employees take Caltrain to work on a daily basis. Her firm also provides discounted Caltrain passes to their employees. It seems that this particular firm is already doing the right thing --- why should they have to pay a tax because other firms don't have their collective commuter acts put together. Unless the city provides an exception process (via verification), this seems to be a bit punitive towards the companies that are already making the correct efforts towards minimizing commuter traffic

13 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Jun 17, 2016 at 1:08 pm

Gale Johnson is a registered user.

Thank you Online Name

You answered a question that the article failed to explain. So, it's a per employee tax...not a per company tax. I guess I should have been smart enough to figure that out, and I assume it's an annual tax. The writer should have made that very clear. OK, I'm opposed to it, for now anyway, and not for reasons discussed at the committee meeting. Where will the money go, into what account, if there is one? Who will decide how to spend it and on which projects (there aren't any defined projects now)? And what is the projected annual revenue from the tax?

Crescent Park Dad made a good point. How will you sort out the companies who have made big strides in reducing their share of employees clogging our streets and parking lots, from others who have done little or nothing?

I am always that meddling guy asking a lot of questions. I respect all our elected city council members who serve on committees, because that's extra time served on their part. I hope they make the right decisions and not just for political showmanship reasons. And just throwing more money at a problem and expecting good results won't work without a well constructed and convincing plan to present to us voters. So, not in 2016 for sure, and maybe not ever.

9 people like this
Posted by SJW
a resident of College Terrace
on Jun 17, 2016 at 1:58 pm

SJW is a registered user.

The only solution to the problem is to bring BART all the way from SF to San Jose--yes through Menlo Park and Palo Alto. What a concept, public transportation. Why we don't have such a system is beyond me. Shouldn't we all be paying for this in a big way. We really don't need to look at the problem or so more studies, just get the darn thing built.

6 people like this
Posted by resident
a resident of Charleston Meadows
on Jun 17, 2016 at 3:46 pm

Thank you SJW. We, collectively, spend all our time debating how to paint our streets, or how to stop development one building at a time. As a result, our ability to navigate this town gets worse and worse. There is no more time. It is about action, and it is about action on a big scale (as you suggest). Everything else is a distraction.
Let's focus development onto the transportation corridors (not away from, like the office cap effort), and insist on true solutions, which include grade separation, BART to us, parking garages, and express lanes for buses.

13 people like this
Posted by Chip
a resident of Professorville
on Jun 17, 2016 at 4:31 pm

@ Sue Allen -
HIgh-density housing near the job doesn't solve traffic problems. Do you assume that a couple both work at the same place? How near? Will people walk 2 blocks or 1 miles to work? Do their kids need rides to school, Dr., dentist, playgroup, sports, etc? Do they move every time they change jobs, which happens pretty often around here? "Company towns" with dense housing existed in mining & manufacturing communities over a century ago & are no longer desirable.
Should all Drs live in high-density housing near hospitals & medical centers? Do you want the whole staff of each school to live in h-d housing next to the schools? How many who work @ Stanford, Kaiser, AMD, Apple, Google, SAP, Oracle,Macy's or Adobe want to live in high-density with their co-workers? Not so many, I'd bet.

Do you want to live in h-d housing next to where you or your spouse work? I don't. And I'd prefer not to live next door to my boss or have my colleagues see what I recycle.

2 people like this
Posted by Kazu
a resident of Downtown North
on Jun 17, 2016 at 6:07 pm

"Let's focus development onto the transportation corridors (not away from, like the office cap effort), and insist on true solutions, which include grade separation, BART to us, parking garages, and express lanes for buses."

Those ideas sound great to me.

"HIgh-density housing near the job doesn't solve traffic problems."

Sure it does. The people who move into the high density housing will tend to be those who work locally, or who can commute to their workplace with relative ease. That last part is why both high density housing and office projects should be located adjacent to major transportation corridors. Many people move to Palo Alto so they can walk to work. There are also many people who move near a Caltrain station so they can easily commute to their workplace near another Caltrain station. That is why adding BART line to San Jose would be such a good idea. Nobody likes being stuck in traffic.

9 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 17, 2016 at 7:12 pm

"HIgh-density housing near the job doesn't solve traffic problems."

"Sure it does. The people who move into the high density housing will tend to be those who work locally, or who can commute to their workplace with relative ease."

Ah, if only people obeyed the notions of our amateur social enginers. But the contrary cusses tend overwhelmingly to do what works best for themselves.

"That last part is why both high density housing and office projects should be located adjacent to major transportation corridors."

How many contradictions can one squeeze into a single posting? It says right up there that the people who move into the high density housing will tend to be those who work locally. Therefore they do not need the services of major transportation corridors. So why live near major transportation corridors?

"Many people move to Palo Alto so they can walk to work."

Judging by the high selling prices of our single family homes located far from jobs, I'd infer those homes are very very desirable, and therefore _very few_ people move to Palo Alto so they can walk to work. And what happens when they change jobs? Do they move out of Palo Alto so they can still walk to work? Or maybe they move to Palo Alto to live in Palo Alto and they just drive to wherever their job happens to be at the moment?

"There are also many people who move near a Caltrain station so they can easily commute to their workplace near another Caltrain station."

According to a local residents's survey, only 5% of such people commute by Caltrain. There are in fact very few workplaces near Caltrain stations, but there is lots of housing near Caltrain stations. So your supposition refers to people who work in someone else's housing. Sounds like a nuts job to me, but... .

And why are people in the high density housing commuting out of Palo Alto anyway, if the people who move into the high density housing will tend to be those who work locally?

13 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jun 17, 2016 at 8:23 pm

So much of this thread about high-density housing and living near your work ignores the reality that the Silicon Valley workforce is highly mobile and ready to move to the next great opportunity.

The "Live near your work" mantra ignores reality by assuming that neither you nor your partner will ever change jobs, that your start-up will last forever, that last decade's high-flyer will never have mass layoffs, that neither you nor your spouse will ever get laid off or recruited for a better job.

In our 2-worker family, over the years we've worked at several different companies in San Francisco, at 2 companies in Mountain View, 2 in Palo Alto and one company each in Cupertino, Foster City and San Carlos. And that excludes consulting clients located in the Bay Area and elsewhere.

10 people like this
Posted by Palo Alto Native
a resident of Palo Alto High School
on Jun 17, 2016 at 9:46 pm

They phoned me this past week with the questions. I thought a business tax would encourage businesses to leave Palo Alto, thus, cut down on traffic. But $50-$100 per head? That's chump change!

Correct me if I'm wrong, seniors, but when BART was being built, I think Palo Alto voted to not have it pass through Palo Alto, for fear the riff-raff would come to Palo Alto.

Agree that building more high density housing is barking up the wrong tree. People don't move to where their jobs are. If they did, freeway traffic would not be as it is!

6 people like this
Posted by Chip
a resident of Professorville
on Jun 18, 2016 at 2:47 pm

It wasn't "fear [of] riff-raff" that kept BART off the Peninsula, it was ill-planned thrift. In order to fund BART, an extra 1/2 % sales tax for 30 years was proposed. It was defeated by San Mateo County voters.

BART went to Daly City in the late 1970's & in 1996 was extended to Colma. Millbrae service opened in 2003 to link Bart & Cal Train to SFO - inefficiently, as north-bound users have to change trains in San Bruno, then backtrack.
The Silicon Valley BART extension now under construction will take riders from Fremont into north San Jose, east of Hwy 680.

1 person likes this
Posted by Grumpy Old Guy
a resident of Palo Alto Orchards
on Jun 20, 2016 at 11:29 am

Instead of a business tax on employees, Palo Alto should create a special assessment district which encompasses the high density employment zone (Science Park). We can draw the map to include university avenue and the PA Science Parks.

The assessment applies only to those property owners and the tax is set against those tenants and property owners. (Don't feel bad for the property owners, they pass the tax onto the business tenants). That tax should fund the projects to ease traffic congestion throughout the city without going after the smaller businesses in the non-congested areas. And the tax should be flexible to fund all projects needed to mitigate traffic congestion, current and future projects.

I recognize that there will be comments that we'll drive businesses away. And from my perspective, that's okay with me. Most major businesses don't support local ones (except for the restaurants). And many of the people who live here don't work at those businesses to begin with. The current business park money flows Bay Area wide. It's the age of UBER/ Gig Economy. The next business generation doesn't care whether the product or services they consume is from the local community or not; other than the product is cheaper. (Check where your IPHONE is made; the first US hands that touch Iphones are the UPS delivery driver). Therefore, the idea that Palo Alto stands to benefit is a myth.

So, from that perspective, if they are causing congestion in Palo Alto for the local residents, those businesses should pay for it. If they don't, they're welcome to leave.

5 people like this
Posted by Lots of tax measures
a resident of Mountain View
on Jun 20, 2016 at 12:50 pm

There will be lots of tax measures on the November ballot - including the VTA's sales tax increase. The more, the merrier. None will get two-thirds.

4 people like this
Posted by City did it
a resident of College Terrace
on Jun 20, 2016 at 3:38 pm

They city created the bad traffic by allow greedy buildings every where. Now they want more money to act like they care.

Sorry, but further commenting on this topic has been closed.

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