News

Palo Alto backs away from business tax

City Council agrees to revisit proposal in the fall

From expanded shuttles and transit subsidies to new garages and improved grade crossings at the rail tracks, Palo Alto has no shortage of projects on its transportation wish list.

But on Monday night, the City Council abruptly backed away from one proposal that would have paid for some of these projects: a business license tax that the council has been contemplating for well over a year.

By a unanimous vote, the council agreed with a recommendation from City Manager James Keene not to move ahead with its original plan to appoint a stakeholder committee that would help construct a potential tax measure and evaluate the projects that the measure would fund. While members acknowledged the plan may still be worth pursuing, they also agreed that now is not the time.

The shift was prompted by Keene's warning that city staff does not have the capacity to perform the demanding public-engagement work that the new tax would require. The planning department is now in the early stages of an intense community process for exploring grade separations along the rail tracks. It is also setting up new parking-permit programs in residential neighborhoods; negotiating with the Santa Clara Valley Transportation Authority over funding from Measure B; evaluating an expansion of the local shuttle system; and reforming the city's parking system, which may soon shift to paid parking.

Even though the council had agreed last fall to move ahead with the new committee, which was charged with exploring the new tax (as well as other funding options), Keene asked council members to reconsider that decision, which followed months of meetings by the specially appointed committee and a series of surveys.

Keene noted that other revenue opportunities have emerged since that time. County voters overwhelmingly approved last November Measure B, a sales tax to pay for transportation improvements. More recently, staff and consultants completed a downtown parking study that recommended parking meters and pay stations on downtown streets and lots -- a proposal that is expected to generate more than $2 million in annual revenues after about two years of capital investment.

Keene told the council Monday night that while he has not concluded that the tax would be a bad idea, the process the council established is "potentially inefficient."

"It would take a lot of time and effort to define even what we want through an engagement process. That will take away from some of these other committed projects we have," Keene said.

The council isn't exactly abandoning the business tax, which may yet re-emerge as the most promising funding option. But after hearing from Keene, Vice Mayor Liz Kniss said she was concerned that the council would be "overreaching" if it were to move ahead with a citizen committee at this time. The council agreed and voted unanimously to defer discussion of the new committee until fall.

"Maybe in the future, but at this point it looks to me as though staff has taken on just about what they could take on," Kniss said.

While the council followed Keene's recommendation, several members acknowledged that backing away from the proposed tax just raises more questions about how the city plans to pay for its traffic-reduction efforts. Councilman Tom DuBois supported delaying the formation of the committee but proposed returning to the subject in a few months, after the Planning and Transportation Commission has a chance to vet a potential funding plan. Otherwise, the city would only be delaying work on projects that it has repeatedly identified as a top priority.

"I understand the staffing concern, but I don't understand how we're going to fund what we're going to fund," DuBois said.

Others shared his concern. Councilman Eric Filseth and Councilwoman Karen Holman both warned that the city's General Fund -- which pays for most city services (not counting utilities) -- would have to absorb much of the cost for the projects. Filseth said that while he sees no problem with the residents paying for valuable transportation services, like shuttling seniors to Avenidas, employers also have a role to play in creating programs that reduce the city's rate of single-occupant vehicles.

"I don't think residents should be buying (Caltrain) Go Passes for Amazon employees," Filseth said.

For others, the plan for a business tax was too hazy. Mayor Greg Scharff and Councilman Adrian Fine both characterized it as a "solution looking for a problem." Kniss called moving ahead with a tax, before figuring out exactly what projects it would fund, "putting the cart before the horse."

Councilman Cory Wolbach agreed with DuBois that the city's planning commission can play a useful role in shaping the measure. Ultimately, however, the council stopped short of delegating this task to the commission. Rather, the council asked staff to return in the fall with an analysis of the city's transportation needs, its available revenues and ways to address the gap between the two.

"There are these other options that I do think we need to explore, even though my personal preference has been throughout this a business license tax," Wolbach said. "I don't think we've done the work to eliminate the other options."

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Comments

58 people like this
Posted by Let Business Pay for Its Problems
a resident of Crescent Park
on May 9, 2017 at 8:33 am

The article says:

For others, the plan for a business tax was too hazy. Mayor Greg Scharff and Councilman Adrian Fine both characterized it as a "solution looking for a problem."

Really? We have no transportation-related problems in Palo Alto? Are these folks asleep?

How about having the business tax pay for the new garages for Downtown and California Ave, our contribution to the Transportation Management Association, enforcement of residential parking permits, and traffic light synchronization, for starters. All of these are needed because our town is overrun with tens of thousands of incoming commuters, many packed into buildings with inadequate parking.

Let's tax the people who caused the problem -- the businesses!


49 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 9, 2017 at 8:57 am

The above poster is absolutely right. Let businesses pay for the problems they're creating as they triple our daily population with commuters. Why should WE the residents pay commuters' public transit fees and carpooling fees??

Also, why should the head of PA's TMA -- Palantir's Bob McGrew -- also be on the steering committee for Imagine Menlo, the business-funded group that was founded in 2014 after Menlo Park sensibly REJECTED the office density we're stuck with. Now they're working to ruin Menlo Park for shoppers, too.

Enough already! Pay attention to what's really happening.


37 people like this
Posted by anon
a resident of Evergreen Park
on May 9, 2017 at 9:55 am

the Mayor said that that businesses were already paying a big tax the TOT, or Hotel tax.
TOT stands for Transient Occupancy Tax. It is not a tax the hotel owners pay but rather the transient occupants!

The posters above are correct. Touch misinformation from our leaders and to many insider deals, especially with Palantir.
Sound familiar. Sounds like 27 University. I guess the grand jury report meant nothing to some of ourvseniour management and Council members!

I don't believe there has been either an apology ordeal explanation from Senior management for selling out the residents and gifting Palantir with a mega sweetheart deal by kicking all residents off a playing field and track and use of the Parking lot at Cubberly for 17 days, 24-7, for a fee so low as to be "symbolic"


34 people like this
Posted by Norma
a resident of Adobe-Meadow
on May 9, 2017 at 12:30 pm

Council Member Fine actually said that the public outreach that would be involved puts a burden on the City and is too costly. Naturally, he is happy to have residents carry the externalities.


39 people like this
Posted by CrescentParkAnon.
a resident of Crescent Park
on May 9, 2017 at 12:35 pm

If as a businessman my product, in this case Palo Alto, is in high demand,
a demand that I cannot meet without raising costs or stressing my resources
what would I do? I raise prices.

So, doing business in Palo Alto is a commodity in huge demand, and our
City Council and supposed leaders seem to see only one side of things
to the detriment of the city and its residents. If Palo Alto was a business
all of our City Council and Community leaders made the decisions they
have made they would be in jail for violateing their fiduciary responsiblity
to the residents/stockholders.

Impose a business tax and tune it to balance the needs of the city and
the costs we all face with the value added of a Palo Alto address.


35 people like this
Posted by Let Them Eat Cake
a resident of Charleston Gardens
on May 9, 2017 at 12:47 pm

No shock that Mr. Fine thinks outreach to and from residents is too costly. I guess that's his reasoning for never responding to our emails with questions and comments.

How special that he's so worried about the city's budget for once.

Besides, if we had a business tax the city might actually have to keep records so we'd actually know how many commuters are really over-running us.


29 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on May 9, 2017 at 12:55 pm

I am not sure I understand the article.

It sounds to me that the council thinks that collecting a tax from businesses to pay for traffic issues is too onerous for city staff and instead it would be much simpler for the residents to pay for the traffic problems.

If this was a unanimous decision on their part then not one of them should be voted back in.

I can't believe that they expect someone like me, who does my best to never go to downtown, should be expected to pay for the traffic solving measures in downtown to help out the business community.


31 people like this
Posted by Palo Alto Imperial Office Park
a resident of Crescent Park
on May 9, 2017 at 1:08 pm

At least Google pays for its own buses and other employers subsidize their employees public transit costs and don't expect the local residents to do so.

This is absolutely outrageous.

By the way, how long ago did the West Elm store next to City Hall close? We noticed the empty store when we went to the packed CC meeting a few weeks ago; it was the first time we'd been downtown in AGES.


4 people like this
Posted by Adrian Fine
a resident of College Terrace
on May 9, 2017 at 1:39 pm

@Norma - To be clear, staff highlighted that the public outreach needed for a business tax measure would be large and was one factor in their recommendation for a delay. I asked if staff tracks and compares how much outreach efforts cost across projects, and how informative/valuable they are to the relevant objectives. The engagement process is one necessary cost associated with any major project in the city, and I want to weight it accordingly.


7 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 9, 2017 at 2:06 pm

There were a lot more things discussed at last night's meeting that PAO should have reported on, not just the business tax. The Study Session was good. I can finally put faces on the members of the P&TC and I think they are a good group of dedicated citizens who will get things done in the best interests of our citizens. It was pointed out by several people, what their role is as opposed to CC's role. Mayor Scharff spoke to it very well and Karen Holman summarized it brilliantly at the end.

The ADU ordinance was on the consent calendar. There were latent, but important and critical, public comments about it, and requests to remove it for further study and review. That fell on deaf ears, as I thought it would.
That was a sad display from the one supporter, the lady bringing her son up to the mic to speak. But, I hope her ADU works out for him. I think, and hope, this city ordinance wouldn't have been necessary for him to have a place to live and his needs fulfilled.

Others spoke about the cost of building ADU's, attached or cottages, and pointed out that the amortization of that cost would have to be picked up by rental fees. So much for affordable housing. One young lady mentioned a $3000/month rate for a friend's, or maybe a neighbor's, cottage. I truly hope it works out for those families it was intended for, but I hope it crashes for all the profit minded supporters. I fail to see why our CC members didn't consider that as a risk after it was pointed out time and time again.

City enforcement?? Fuggedaboutit!! We'll take care of it in my neighborhood with pitchforks and torches. lol!

For you city kids, pitchforks were used, primarily, for stacking hay or straw.

The promised report, quarterly I think, on how the ADU's are working out, is critical. If it isn't tainted by bias it should reveal whether CC's decision was a good one or a bad one, or just a 'meh' one.


27 people like this
Posted by mj
a resident of Evergreen Park
on May 9, 2017 at 4:02 pm

My take on this is slightly different. A large percentage of the downtown commercial space downtown is owned by a handful of people, some multi-generation, so their property tax is fixed at the Prop 13 rate in the 1970's plus a 2% increase per year. These commercial spaces were designed with a ratio of 250 sq ft per employee. Now these property owners are raking in the cash by leasing to companies where employees are squeezed in cheek by jowl. I have no problem with the property owners renting to the highest bidder, but I do have a problem with the property owners then expecting residents to pay for parking garages for their tenants. Even commercial properties that have not been inherited only change hands on average every 30 or 40 years,. Which is why their share of the property tax is a much smaller proportion of the city's budget than residential property tax, especially because houses turn over on average every 10 years or so I believe. In addition, when commercial properties do change hands, there are legal ways to do so without triggering a new property tax assessment. That's one of the specialities of commercial real estate lawyers I understand.


31 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 9, 2017 at 4:28 pm

@Adrian Fine, leaving aside outreach for the moment, please answer the first major point: Why should We the RESIDENTS pay for the transportation and parking messes that the businesses and their over-crowding of downtown have created?

There are 3 times as many of them during the work day as there are residents!

Why should WE pay commuters to commute to and from Palo Alto? Google pays for its own buses and so should the businesses in Palo Alto. Defund the TMA! It's a money sink and just another drain on US.


15 people like this
Posted by Annette
a resident of College Terrace
on May 9, 2017 at 5:15 pm

Annette is a registered user.

Eric Filseth: please elaborate on: "I don't think residents should be buying (Caltrain) Go Passes for Amazon employees". I agree with you but would appreciate some background. When did Palo Altans start covering that expense, for how many companies, and what has that cost us? How is this not a gift of public funds?

If we really are paying for that, where does one sign up for the Palo Alto gravy train?!? City Hall when it is open?

I support this decision. We just approved a huge 30 year tax increase for transportation and the Governor's gas tax also passed. IF the allocations are done as promised and IF the gas tax money is used as promised why should a 3rd layer of government need to ask for more transportation-related tax dollars?


14 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 9, 2017 at 7:02 pm

@Annette. oh, it's true. Check out the Palo Alto TMA web site. Here's links to the site and the EMPLOYEE benefits. I couldn't tolerate looking at the ones for the employers.

Web Link

For Employees
Help with your commute. You may qualify for a free bus or train pass OR Lyft credits.

Web Link

Employees
If you’re one of the thousands of employees who’d like to find a better way to get to work, Palo Alto TMA can help! Right now, we’ve got three programs just for Downtown employees. Not sure what might work for you – or need advice? We’re happy to help! We can evaluate your individual needs and help you sort out the options.

Take a look at what’s currently offered:
$2 Carpools
EXPLORE!
People are carpooling to Palo Alto from all over the Bay Area!
See where the carpoolers are and find out how you can save more time and money!

Free Transit Passes
EXPLORE!
Would you take transit if it wasn’t so expensive?
You may qualify for a FREE pass on Caltrain, SamTrans, VTA or the Dumbarton Express.

Lyft for Short Trips


13 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 9, 2017 at 7:08 pm

At last night's meeting, Mr. Keene was enumerating the need for more TMA and cited the bike plan as another reason to fund it. That program was originally budgeted at $1,000,000 plus plan to supply $3,142 bikes to the commuters and to hire a $150,000 straight salary staffer to supervise it.


29 people like this
Posted by No to development
a resident of Downtown North
on May 9, 2017 at 7:29 pm

As other have stated - it is absolutely ridiculous that the city of Palo Alto can't manage to do what most other cities do: register businesses and tax them for their impact on the city. We aren't that huge of a city. Get someone to walk the streets if necessary and give these city employees the credentials to ask who the business is and what they do and how many people work there. How hard can this be. We seem to have the whiniest and laziest city. They want to hire consultants to do everything when a motivated high school intern or two could probably do this job over the summer. Then once we have the list look at it and access the impact and start to tax them for their use of parking spaces, roads, infrastructure.

And why are the pro-growth city council people having tax payers foot the bill for huge garages for businesses to use when they are the vary ones saying that businesses don't need to put is adequate parking since somehow people will "magically" bike or bus or float to work. They should make up their minds - do we need parking or not. Or is this how they let their developer friends off the hook to pay for their own parking and then foist it back on the public.

As always - too many people destroys the livability of the city. Time to stop development. We are destroying the our quality of life and the world we live in.


Like this comment
Posted by No to development
a resident of Downtown North
on May 9, 2017 at 7:32 pm

I meant assess not access. Sorry


15 people like this
Posted by Myron
a resident of Old Palo Alto
on May 9, 2017 at 8:25 pm

Not a smart move. Going to need that tax to pay for those un-funded pensions. 300 million dollars and counting...


13 people like this
Posted by No to Development II
a resident of College Terrace
on May 9, 2017 at 10:14 pm

Maybe Mr. Filseth and Mr. Fine and other council members could weigh in and respond to your questions and comments?


2 people like this
Posted by chris
a resident of University South
on May 9, 2017 at 11:20 pm

The TMA and garages and Caltrain passes should be paid for by parking fees.
Take a look across El Camino to Stanford to see how it does it.

The business tax is a STUPID idea. It does not discriminate between companies that are good or bad citizens. Make the cars that are parking in downtown and Cal Ave carry the burden of the problems they are cauding.


7 people like this
Posted by Eric Filseth
a resident of Downtown North
on May 10, 2017 at 12:03 am

@Annette,

Right now residents are not paying significantly for business employee passes, but if the TMA gets significant future funding from the city’s General Fund, then we would do.

This is because a very considerable component of TMA is either subsidizing or outright purchasing Caltrain and other transit passes for commercial employees. And, the General Fund’s largest sources are residential property taxes and sales taxes, of which the majority in Palo Alto are paid by residents.

In practice we actually are paying a little bit for TMA now, because some of the seed funding for the TMA pilot did indeed come from the General Fund. But this is not supposed to be ongoing. So the City needs to expedite developing a stable, appropriate long-term funding source for TMA; this was part of the council’s direction to Staff on Monday night.

----------------------------

The parking garage issue is slightly different. In practice, most of the garage funding comes from the Hotel Tax. Since most Palo Alto hotel revenue is from visitors to area businesses and Stanford, it’s fair to say that to first order, the direct financial cost of the garages falls on businesses, not residents. The intangibles --- traffic, pollution, upward pressure on housing prices, etc --- of course do fall on residents.


28 people like this
Posted by Paloantir Forward.
a resident of Charleston Gardens
on May 10, 2017 at 2:20 am

As per the article this week, the TMA only now serves 100 employees at $520 per carpool = $52,000 and that excludes Lyft and paying all their public transit costs. Sure the numbers are small now but they'll quickly add up.

But they question remains why the RESIDENTS should pay for what is clearly a BUSINESS expense. Google pays for its own buses. Why can't $20,000,000,000 companies like Palantir whose employee is chairing the TMA get to shift the burden from his rich employer to us while we get our services and quality of life cut hecause we're paying for THEIR employees.

If Google and other employers can pay for their own buses and transit expenses, why can't Palo Alto's employers?



23 people like this
Posted by City Council Being Dishonest
a resident of Crescent Park
on May 10, 2017 at 7:16 am

Councilmember Eric Filseth writes that "most of the garage funding comes from the Hotel Tax."

But when we voted to raise the Hotel Tax, here's what the ballot language promised:

"To provide funding that cannot be taken away by the State for general fund infrastructure and City services such as earthquake safe fire stations; pedestrian and bike improvements including safe routes to school, streets, sidewalks, paths, and bridges; and maintaining parks and recreation facilities, shall the City increase the hotel/motel tax by two percent and update language to confirm equal treatment of traditional and online bookings?"

It didn't say "to create commercial parking spaces instead of requiring building owners to do so."

Had that been the wording on the ballot, it never would have passed.

It's also disingenuous now to say -- well it's being paid by businesses so we'll spend it on them. First, lots of people stay in Palo Alto hotels because they're here to see their families, attend Stanford events, and such. They are not businesses and they aren't causing parking problems in Downtown and on Cal Ave. So why should they pay to solve those problems? And as for business travellers we have far more offices in the Stanford Research Park and near 101 than Downtown and on Cal Ave. Those businesses won't benefit one cent from the two garages either.

This is just bait and switch! Promise us money for parks and the like and then spend to help out a handful of greedy developers who failed to provide enough parking.


20 people like this
Posted by Klein
a resident of Crescent Park
on May 10, 2017 at 7:56 am

The same council members always vote in favor of business. We need new people in charge.


29 people like this
Posted by R. White
a resident of Greenmeadow
on May 10, 2017 at 8:42 am

I'm devastated by what five of our city council members and our City Manager, Jim Keene, are doing to Palo Alto. It's humbling to watch your home town degrade so quickly, and proves that we need better candidates to run for city council next term. Candidates who don't prioritize business over community, and who behave with integrity once elected.


12 people like this
Posted by Annette
a resident of College Terrace
on May 10, 2017 at 12:25 pm

Annette is a registered user.

@Eric Filseth - thank you. I appreciate your response.

I get that when it comes to traffic and parking everyone is impacted and we all benefit by reducing the number of cars on the road. And that there's a $ cost to paying people to not drive. But in our quest for effective TDM we should neither compound problems or relieve businesses of their fair share of the cost. The former policy that allowed "under-parked" buildings should have been discontinued long before it was. We cannot reverse the damage done by that but we can:
1) limit the amount of additional office development that is allowed downtown at least until additional garages are built; and
2) factor in a higher occupancy rate for tech companies so that the estimate of required parking is realistic; and
3) require private businesses to pay for the GoPasses. Using the General Fund for that isn't right. Commuting is a cost of employment for the employer and the employee; how the cost is shared shouldn't involve the City or City funds.
4) NOT hire a manager or staff dedicated to this; doing that further shifts the cost from businesses to the City and adds to the existing and ENORMOUS pension problem.

Residents rely on City Council to be fiscally prudent. I hope the Finance Committee will be rigorous in their review of the City Manager's proposed budget. The unfunded pension liability alone dictates that we go forward with a very tight, no-frills budget.


4 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on May 10, 2017 at 12:44 pm

The problems are that the CC are way behind the reality of a situation.

As an example, I was talking to someone who uses the park & ride lot on Page Mill by 280. They meet a coworker (or two) in that lot and carpool to their work destination to share parking costs. The biggest problem is that lot fills and people park on grass and on the streets. It is totally inadequate for the number of cars that want to use it. Additionally, the carpool has to be in a designated car to use that permit. If that driver is using his wife's car, is on vacation, etc. the other carpoolers are stuck!

I see no innovation in any of this. It will not help the problems that already exist for those who work in town. It makes commuting much more expensive particularly for those who don't start their commute along the Caltrain corridor and is horrendous for any low income shift worker.

It also does not mention once again short term parking for 10 minute errands or those who need to pay for occasional 3 hour or more parking.

The reality is that with or without a business tax, parking is not working today and some of the solutions proposed will not help for a period of years, and will certainly not help the average Palo Altan park or drive around town. Remember most errands are done on the way to or from the final destination, not single trips from home and back again.


2 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 10, 2017 at 2:18 pm

I think there will be a combination of things required. So far, the effort by TMA seems paltry compared to the number of SOV's coming into town everyday. I hope it works out that the program will be self-supporting and not rely on our General Fund in the future, and I support their work and efforts, altho the results haven't been exhilarating so far. The General Fund gets hit by a lot of external demands. I would like to see the business tax get back into the forefront, if it will actually be used for easing and mitigating the parking problems. Yes, an increase in parking permits and fees is warranted, but not at the usury rates proposed. So, now we will get two new big parking garages built, our taxpayer money at work. Wonderful, altho I'll probably never park in them. I would like to see a study done on how that coincides with the big increases in parking fees. Will those fees really be necessary, other than to fund our burgeoned budget? Just asking!


8 people like this
Posted by mj
a resident of Evergreen Park
on May 10, 2017 at 2:21 pm

It is telling that although it is normal for towns to have a mandator business tax, and most around us do, that the current majority of council members vote against a business tax. Which could be minimal for those who are self-employed or have only a few employees. Instead we have a voluntary registration program that is incomplete and apparently unenforceable. Cities should know who is doing business in their town.


10 people like this
Posted by mj
a resident of Evergreen Park
on May 10, 2017 at 2:28 pm

@ City Council Being Dishonest

Thank you for quoting the wording of what citizens voted for when they approved the hotel tax. Does anyone know how this tax was diverted from what we voted for? Who was/is responsible for doing this?


17 people like this
Posted by Pat Burt
a resident of Community Center
on May 10, 2017 at 2:50 pm

The odd refrain employed by Mayor Scharff and other council members that "this is a solution looking for a problem" could be dismissed as mere more political posturing if it was not such an important matter for those who live or work in our community. As others have stated, it is baffling that these council members don't see severe traffic congestion, related parking demands and their environmental impacts to be a problem.
For three years the council has recognized the criticality of traffic and parking problems, but has done little to address the root cause - too many car trips. Last year we received a plan and budget for just the downtown TMA at $1.4M that would reduce single occupancy vehicles by 30%, if funded. The council recognized that in the near future the TMA would need to expand to the greater downtown area as well as Cal Ave and beyond. In addition, the council has committed to significantly expanded shuttles and bike share programs. Downtown parking fees and VTA funds would only cover a fraction of the costs for these programs and certainly not fund elsewhere in the city.
When we considered a Business License Tax last year the Chamber of Commerce and the Council asked that the measure not go on the 2016 ballot so that more time be taken to engage a stakeholder group that would flesh out the programs to be funded and get buy in to a well thought out measure. Those same people have now reversed themselves and criticized the value of a stakeholder group.
The risk now is that the can will just be kicked down the road long enough so that the same "we don't have time" arguments will be made to not put it on the 2018 ballot.
Despite skepticism by some, these are problems that can and must be solved. But they won't solve themselves. We need the resources to implement the plan and a council that is truly committed to its success.


8 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on May 10, 2017 at 3:41 pm

There is nothing left of Palo Alto, so why not just dispense with the charade and rename it Palantir?


2 people like this
Posted by Emma
a resident of Downtown North
on May 10, 2017 at 10:34 pm

@Pat Burt

Can you shed any light on the issue of whether it is the new Hotel Tax that is paying for the upcoming downtown garage?


Like this comment
Posted by musical
a resident of Palo Verde
on May 10, 2017 at 10:50 pm

^ meaningless without the definition of "fungible".


3 people like this
Posted by Annette
a resident of College Terrace
on May 11, 2017 at 7:04 am

As I recall, past discussions about a business tax raised all sorts of concerns. One issue was implementation, particularly since the launch of the Business Registry did not go well, and that is a relatively simple matter. Also, non-profits were to be exempt despite their demands on city services and impact on infrastructure. And it was unclear if the tax would be based on headcount or revenue. If the latter, there were myriad concerns, including confidentiality, which I suspect would only be heightened now given that public trust is at an all time low.


12 people like this
Posted by Pat Burt
a resident of Community Center
on May 11, 2017 at 8:10 am

@Annette
The issues you raised are among the items that were intended to be hashed out by a stakeholder group. Head count was tentatively thought of as the basis for the tax, but nothing was finalized. Now that the council has not gone forward with a stakeholder group, they and the staff need to figure out how and whether to resolve a bunch of open questions in a way that would achieve broad support of the electorate.
@Emma
Despite claims by Mayor Scharff, the recent increase in the hotel tax rate was not the primary funding mechanism for the garages. It was only the last fraction of the fund. The bulk of the Infrastructure Fund came from a series of sources including as I recall, several years of general fund surpluses, Stanford Hospital impact fees and new hotels. Scharff was on the Infrastructure Committee with me so he knows this. My guess is that Eric Filseth passed on this false claim because he assumed what Scharff said was accurate.


14 people like this
Posted by Pat Markevitch
a resident of Downtown North
on May 11, 2017 at 9:55 am

I agree with Pat Burt that there needs to be a Stakeholder Group. Citizen engagement is one of the most important and transparent methods of working through key issues that our city faces. I urge the Council to move forward with the original idea of forming a group in order to go over these issues.


5 people like this
Posted by Pat Burt
a resident of Community Center
on May 11, 2017 at 10:40 am

Here is a link to the Infrastructure Plan as of December 2015, Web Link. Pages 5 and 6 have good tables. The funding sources have changed slightly since then, but the costs of construction have shot up and the size of Cal Ave garage has grown significantly.


9 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 11, 2017 at 11:19 am

My memory of the discussion of the business tax and business registry matches Annette's; I remember thinking that basing a tax on revenue was a license for creative accounting and/or short-changing the city because many start-ups have little or no revenue for years if ever.

Why can we just have a businesses registry based on employee counts and then tax the companies accordingly? It's the number of commuters that are causing the congestion. not whether they're profitable.

I'm tired of residents subsidizing businesses. Let them help offset their employees transit expenses.


8 people like this
Posted by Another Citizen Unhappy With How the TOT is Being Spent
a resident of Another Palo Alto neighborhood
on May 11, 2017 at 11:31 am

I am extremely unhappy that the TOT money is being spent on parking garages. "Bait & Switch" is right. I expect that money to be spent as promised. I'm furious about this, City Council. Do what you promised.


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