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With its eyes on the November 2020 ballot, Palo Alto is preparing to survey residents this month to gauge their appetite for a proposed business tax.

The survey, which the City Council is expected to authorize on Monday night, will be the first of two focusing on a 2020 tax measure to fund transportation projects and affordable housing. It will include open-ended questions about what a potential tax would fund and about possible exemptions for certain types of businesses, according a report from Administrative Services Department.

The survey will also ask residents for their opinions on city services, fiscal management and infrastructure, according to the report. Results will be presented to the City Council in December.

The firm Fairbanks, Maslin, Maullin, Metz & Associates (FM3), which conducted polling for the city before its 2018 hotel-tax measure, plans to issue the second survey in 2020, once the potential tax measure is more refined.

The $85,000 contract with FM3 is one of two that the council is scheduled to approve on Monday pertaining to the 2020 ballot measure. The council is also set to approve a $94,125 contract with the firm Terris Barnes Walters Boigon Heath Inc (TBWB Strategies) to assist with outreach strategies, according to the report.

The outreach will have the goal of involving the public using multiple approaches during the development of the potential ballot measure, the report states.

The two surveys are part of the workplan that the council’s Finance Committee unanimously approved on Oct. 15. The outreach plan is part of the council’s multi-year effort to create a business tax to pay for transportation and, to a lesser extent, affordable housing. Palo Alto is one of few cities in the region without a business tax, and its last effort, in 2009, faltered at the ballot box.

Among the factors that the council is still considering is whether to make the business tax a specific tax, which would specify what the funds will be used for used for and which requires approval by two-thirds of those voting, or a general tax, which requires a simple majority and gives the council more leeway in how to spend the money.

In its last two tax measures, each of which raised the city’s transient-occupancy-tax rate, the council had opted to go with a general tax, with non-binding language about how the money will be spent.

While the current tax proposal hasn’t encountered the type of opposition that the city faced from the business community in 2009, some business leaders have urged the council to carefully evaluate the impacts that the tax would have on the city’s business climate and have favored a specific tax over a general one.

Tiffany Griego, managing director of Stanford Research Park, urged city leaders prior to the Oct. 15 meeting to assess the long-term consequences of imposing a tax that exceeds the tax structures in surrounding municipalities.

“Demand for space in the Research Park is elastic,” Griego wrote to the city. “Businesses, large and small, weigh the cost of doing business — and how business friendly a city is or is not — before making decisions about location or point of sale. Moving toward a business tax is a significant decision that should be based on accurate information and the context of the competitive landscape.”

Gennady Sheyner covers local and regional politics, housing, transportation and other topics for the Palo Alto Weekly, Palo Alto Online and their sister publications. He has won awards for his coverage...

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10 Comments

  1. What we really need is not so much a business tax but an accurate accounting of who is actually working in Palo Alto and how they are getting to work here.

  2. Is this the same polling firm the city council retained re the ballot initiative to reduce — not eliminate — office construction?

  3. PACC spends funds with abandon and can’t be trusted with a general tax. Do a special tax for transportation and affordable housing or it will be a NO.

  4. No new taxes. No. None. The city has $455 million in unfunded pension liabilities for it’s public employees. Pay that off. Cut jobs and expenses. Stop taxing and stop raising fees. Given the city’s poor financial management, why would we give you more money?

  5. How about shrinking staff to the point where we can pay off the pension? And, getting rid of these liabilities going forward by making a 401K plan. Have the city contribute to it, whatever, just stop acruing unfunded liabilities.

    Um, that’s a “no thank you” to the business tax.

  6. @Blarryg, why not both a business tax since commuters already outnumber residents at least 4:1 AND replacing the defined benefit plans with a 401K?

    The rationale for civil service pensions was the lower salaries govt employees got but no longer — not if you’re tracking the lucrative salary-replacement pensions. housing allowances, car allowances etc we give aour civil “servants” get over their 40+-yr-retirements, esp. since some are quite adept at collecting from multiple municipalities.

    Mr. Benitzen, the policeman who recently “left” under a cloud will be getting $118,000 a ear for the rest of his life. You do the math.

  7. Among the hodge-podge of issues that are going to be polled please add:
    1. RV locations and prohibitions. Son is in Oakland Hills and they have signs that say no vehicle above a certain height is allowed to park on the streets. The height eliminates the RV’s. It is level of an SUV.
    2. No sleeping in vehicles in R-1 neighborhoods is allowed. That is a major safety issue to the tax-paying residents.
    3. No RV’s on ECR. That is a misuse of taxpayer supported property.
    4. Request that PA provide a RV/car dweller location with bathrooms and dump site for RV sludge.
    5. Any other tax-payer issues for the city? Can we get to the point that the tax-payer who is paying the bills is going to call the shots on quality of life and safety issues. We keep reading about hostile house break-ins, car break-ins and are slipping out of control.

  8. Our current concern is fires and smoke. So how is the city doing on that front. That is a business expense for any business in the city and foothills. Management of dry vegetation is a top concern. Every business and resident should be on top of that problem. I got a letter from my insurance company – Allstate – that stated that lack of attention to maintenance of property would result in a higher insurance rate. So how is the city incorporating those concerns in management of business sites within the city. When the tax rate is projected then it should be flexible to address a companies attention to maintenance of property within the city. It has to be part of the contract with any company and the tax is the leverage to mandate compliance.

    As to R-1 property – people sleeping in cars and RV’s are a top concern as that group of people are not responsible for the upkeep and taxes, expenses on any property in the city. Add to that companies that expect to use residential streets as a parking lot for their employees needs to be addressed. On my street we pick up food wrappers,plastic bottles, and worse cigarette butts. What possesses employees of a company – or visitors at a company to dump their car trash on the street. Add that as a tax for your non-profits as doing business in this city. No one who owns property in this city needs to pay more to monitor the reckless activity of company employees – profit or non-profit. We have a large non-profit in south PA that directs it’s employees to use residential streets as a parking lot. What a mess. Non-profits need to get their acts together and taxed if they cannot monitor and control their interaction with the residents.

  9. “Our City Government in ACTION! Agenda Item #1: Hire a consultant firm.”

    Then why don’t we recall the City Council and elect consultants in their place?

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