News

Palo Alto modifies business tax as decision deadline looms

City Council moves forward with more exemptions

VMware is one of the largest companies based at Stanford Research Park. Embarcadero Media file photo by Lloyd Lee.

After seeing its negotiations with the business community fizzle, the Palo Alto City Council pushed forward on Monday with its plan to place a business tax based on square footage on the November ballot.

In doing so, however, the council agreed to revise the tax measure to exempt all businesses with less than 10,000 square feet of space, a change that effectively excludes all small retailers from the tax. Council members also moved to set the rate at 11 cents per square foot, a shift from an earlier proposal that would have set the rate at either 6 cents or 12 cents, depending on the size of the business.

The council left the door slightly ajar for last-second changes based on a potential agreement with a coalition of business groups that are opposing the tax. Council member Tom DuBois suggested that it's still possible for the council to tweak the proposal before the final resolution is adopted on Aug. 8, the council's last meeting before Santa Clara County's Aug. 12 deadline to place the measure on the ballot.

Barring any surprising developments, the council's action means that Palo Alto voters will get to weigh in on a tax measure that would raise roughly $15 million per year, with the proceeds used to fund public safety, transportation and affordable housing. The council voted 5-2, with council members Alison Cormack and Greg Tanaka dissenting, to support the revised proposal, which was based on recommendations from its ad hoc committee.

The committee's three members — Mayor Pat Burt and council members Tom DuBois and Eric Filseth — all argued Monday that the proposed tax would have a modest impact on large businesses, amounting to about 1% of rent costs. The latest revision, which raised the threshold for exempted businesses from 5,000 square feet to 10,000 square feet, aims to shield just about all small and medium retailers from the proposed tax.

Help sustain the local news you depend on.

Your contribution matters. Become a member today.

Join

DuBois noted that with the higher exemption, more than 50% of Palo Alto businesses — and all small businesses — are excluded. Filseth concurred.

"With 5,000 square feet, we exempt most of the restaurants in town and most the smallest businesses, but there's also kind of a fair number of community-serving retail businesses in the 5,000- to 10,000-square-foot range," said Filseth, citing Hassett Hardware, Palo Alto Bicycles and Mike's Bikes as examples. "We thought that 10,000 square feet was a more appropriate target on that."

There was no indication, however, that the revision would bring the council any closer to a compromise with the coalition of business leaders that is opposing the proposed tax, a group that includes the Silicon Valley Leadership Group, the Palo Alto Chamber of Commerce and NAIOP Silicon Valley, a group that represents commercial developers. Dan Kostenbauder, vice president for tax policy at the Silicon Valley Leadership Group, submitted a letter to the council prior to the Monday discussion arguing that Palo Alto's tax would be "disproportionately higher than the business taxes in neighboring communities."

He noted in the letter that Sunnyvale caps the tax that any business would pay at less than $14,000, while San Jose has a cap of less than $167,000. Palo Alto's proposed tax, however, would not have a cap of any sort, which creates a "significantly higher tax burden."

One company that is opposing the tax is Maxar Technologies, a manufacturer of satellites and other space technology and parent company of SSL (formerly Space Systems Loral), which has a manufacturing facility on Fabian Way.

Stay informed

Get the latest local news and information sent straight to your inbox.

Stay informed

Get the latest local news and information sent straight to your inbox.

Karen Cox, vice president for government relations and public policy at Maxar Technologies, asserted that the tax would be "particularly onerous for manufacturing, industrial, and research and development facilities, that often require substantial amounts of square footage that are disproportionate to their revenue stream or economic impact."

"For example, our company builds large satellites, robotics, and spacecraft systems that require a significant amount of square footage. The same is true for many of Palo Alto's research facilities. Basing the business tax on the square footage of the company's operation will penalize these important sectors of the City's economy and may encourage them to move elsewhere," Cox wrote.

The vast majority of the speakers at Monday's meeting fully supported the tax effort, with many pointing out that Palo Alto is an anomaly in not having a business tax. Alex Comsa, a Realtor who is running for a City Council seat, called the council's tax proposal "very progressive and very generous for business." He noted that local businesses have been facing annual rent hikes of 5% or more over the past few decades, a factor that far exceeds the impact of the proposed tax.

Mayor Pat Burt agreed and suggested that the notion that a 1% rent increase would drive the decision on whether a company stays in Palo Alto "just doesn't add up from a practical standpoint."

He also stressed the importance of raising money for the three areas targeted by the tax, particularly affordable housing. The city currently does not have anywhere close to the resources that would be required to meet the state's mandates for constructing below-market-rate housing, which typically relies on government subsidies.

Burt characterized the latest version of the business tax as a "compromise."

"I think we have a balanced measure and we have a reasonable measure going forward that meets some really important community needs," Burt said.

Other residents pointed to the need to raise revenue for grade separation, the redesign of rail crossings so that tracks would not intersect with roads. Palo Alto is currently planning for grade separations at the Churchill Avenue, East Meadow Drive and Charleston Road crossings — projects that will cost hundreds of millions of dollars. While some of the funding for grade separation is expected to come from Santa Clara County's Measure B of 2016, as well as other sources, local funds will also be crucial, said Nadia Naik, who served as co-chair of the Expanded Community Advisory Panel, a group that analyzed options for grade separation.

"Local funding for grade separation is needed to match Measure B dollars and pursue federal funding and this tax will help us achieve our long-term goal of trying to create a safe environment in the city and obviously separate the trains from the cars, pedestrians and bikes," said Naik, who spoke as an individual and not representing the group.

Keith Reckdahl observed that a generation ago, city taxes were evenly split between residents and businesses. Today, residents pay the vast majority of the taxes. The proposed business tax wouldn't even come close to restoring the parity, he said.

"If businesses are chased out of Palo Alto, it's because of landlords' rent increases, not because of this tiny tax," said Reckdahl, who serves on the Planning and Transportation Commission but spoke as an individual.

Tanaka and Cormack remained opposed to the tax, though for different reasons. Cormack was open to the idea of a business tax but argued for a lower tax rate, something in the neighborhood of 5 cents per square foot. The measure, she suggested, would have a higher chance of passing with a smaller rate and, potentially, less opposition.

Tanaka categorically opposed any attempts at business tax, arguing that it would hurt the local economy. On Monday, he argued that the city already has a huge budget and doesn't need another tax.

"We have to spend within our means," Tanaka said.

Craving a new voice in Peninsula dining?

Sign up for the Peninsula Foodist newsletter.

Sign up now
Gennady Sheyner
 
Gennady Sheyner covers the City Hall beat in Palo Alto as well as regional politics, with a special focus on housing and transportation. Before joining the Palo Alto Weekly/PaloAltoOnline.com in 2008, he covered breaking news and local politics for the Waterbury Republican-American, a daily newspaper in Connecticut. Read more >>

Follow Palo Alto Online and the Palo Alto Weekly on Twitter @paloaltoweekly, Facebook and on Instagram @paloaltoonline for breaking news, local events, photos, videos and more.

Stay informed on important city government news. Sign up for our FREE daily Express newsletter.

Palo Alto modifies business tax as decision deadline looms

City Council moves forward with more exemptions

by / Palo Alto Weekly

Uploaded: Tue, Aug 2, 2022, 12:19 am

After seeing its negotiations with the business community fizzle, the Palo Alto City Council pushed forward on Monday with its plan to place a business tax based on square footage on the November ballot.

In doing so, however, the council agreed to revise the tax measure to exempt all businesses with less than 10,000 square feet of space, a change that effectively excludes all small retailers from the tax. Council members also moved to set the rate at 11 cents per square foot, a shift from an earlier proposal that would have set the rate at either 6 cents or 12 cents, depending on the size of the business.

The council left the door slightly ajar for last-second changes based on a potential agreement with a coalition of business groups that are opposing the tax. Council member Tom DuBois suggested that it's still possible for the council to tweak the proposal before the final resolution is adopted on Aug. 8, the council's last meeting before Santa Clara County's Aug. 12 deadline to place the measure on the ballot.

Barring any surprising developments, the council's action means that Palo Alto voters will get to weigh in on a tax measure that would raise roughly $15 million per year, with the proceeds used to fund public safety, transportation and affordable housing. The council voted 5-2, with council members Alison Cormack and Greg Tanaka dissenting, to support the revised proposal, which was based on recommendations from its ad hoc committee.

The committee's three members — Mayor Pat Burt and council members Tom DuBois and Eric Filseth — all argued Monday that the proposed tax would have a modest impact on large businesses, amounting to about 1% of rent costs. The latest revision, which raised the threshold for exempted businesses from 5,000 square feet to 10,000 square feet, aims to shield just about all small and medium retailers from the proposed tax.

DuBois noted that with the higher exemption, more than 50% of Palo Alto businesses — and all small businesses — are excluded. Filseth concurred.

"With 5,000 square feet, we exempt most of the restaurants in town and most the smallest businesses, but there's also kind of a fair number of community-serving retail businesses in the 5,000- to 10,000-square-foot range," said Filseth, citing Hassett Hardware, Palo Alto Bicycles and Mike's Bikes as examples. "We thought that 10,000 square feet was a more appropriate target on that."

There was no indication, however, that the revision would bring the council any closer to a compromise with the coalition of business leaders that is opposing the proposed tax, a group that includes the Silicon Valley Leadership Group, the Palo Alto Chamber of Commerce and NAIOP Silicon Valley, a group that represents commercial developers. Dan Kostenbauder, vice president for tax policy at the Silicon Valley Leadership Group, submitted a letter to the council prior to the Monday discussion arguing that Palo Alto's tax would be "disproportionately higher than the business taxes in neighboring communities."

He noted in the letter that Sunnyvale caps the tax that any business would pay at less than $14,000, while San Jose has a cap of less than $167,000. Palo Alto's proposed tax, however, would not have a cap of any sort, which creates a "significantly higher tax burden."

One company that is opposing the tax is Maxar Technologies, a manufacturer of satellites and other space technology and parent company of SSL (formerly Space Systems Loral), which has a manufacturing facility on Fabian Way.

Karen Cox, vice president for government relations and public policy at Maxar Technologies, asserted that the tax would be "particularly onerous for manufacturing, industrial, and research and development facilities, that often require substantial amounts of square footage that are disproportionate to their revenue stream or economic impact."

"For example, our company builds large satellites, robotics, and spacecraft systems that require a significant amount of square footage. The same is true for many of Palo Alto's research facilities. Basing the business tax on the square footage of the company's operation will penalize these important sectors of the City's economy and may encourage them to move elsewhere," Cox wrote.

The vast majority of the speakers at Monday's meeting fully supported the tax effort, with many pointing out that Palo Alto is an anomaly in not having a business tax. Alex Comsa, a Realtor who is running for a City Council seat, called the council's tax proposal "very progressive and very generous for business." He noted that local businesses have been facing annual rent hikes of 5% or more over the past few decades, a factor that far exceeds the impact of the proposed tax.

Mayor Pat Burt agreed and suggested that the notion that a 1% rent increase would drive the decision on whether a company stays in Palo Alto "just doesn't add up from a practical standpoint."

He also stressed the importance of raising money for the three areas targeted by the tax, particularly affordable housing. The city currently does not have anywhere close to the resources that would be required to meet the state's mandates for constructing below-market-rate housing, which typically relies on government subsidies.

Burt characterized the latest version of the business tax as a "compromise."

"I think we have a balanced measure and we have a reasonable measure going forward that meets some really important community needs," Burt said.

Other residents pointed to the need to raise revenue for grade separation, the redesign of rail crossings so that tracks would not intersect with roads. Palo Alto is currently planning for grade separations at the Churchill Avenue, East Meadow Drive and Charleston Road crossings — projects that will cost hundreds of millions of dollars. While some of the funding for grade separation is expected to come from Santa Clara County's Measure B of 2016, as well as other sources, local funds will also be crucial, said Nadia Naik, who served as co-chair of the Expanded Community Advisory Panel, a group that analyzed options for grade separation.

"Local funding for grade separation is needed to match Measure B dollars and pursue federal funding and this tax will help us achieve our long-term goal of trying to create a safe environment in the city and obviously separate the trains from the cars, pedestrians and bikes," said Naik, who spoke as an individual and not representing the group.

Keith Reckdahl observed that a generation ago, city taxes were evenly split between residents and businesses. Today, residents pay the vast majority of the taxes. The proposed business tax wouldn't even come close to restoring the parity, he said.

"If businesses are chased out of Palo Alto, it's because of landlords' rent increases, not because of this tiny tax," said Reckdahl, who serves on the Planning and Transportation Commission but spoke as an individual.

Tanaka and Cormack remained opposed to the tax, though for different reasons. Cormack was open to the idea of a business tax but argued for a lower tax rate, something in the neighborhood of 5 cents per square foot. The measure, she suggested, would have a higher chance of passing with a smaller rate and, potentially, less opposition.

Tanaka categorically opposed any attempts at business tax, arguing that it would hurt the local economy. On Monday, he argued that the city already has a huge budget and doesn't need another tax.

"We have to spend within our means," Tanaka said.

Comments

Citizen
Registered user
College Terrace
on Aug 2, 2022 at 5:29 am
Citizen , College Terrace
Registered user
on Aug 2, 2022 at 5:29 am

No new taxes that will then be passed on to consumers and/or reduce employee pay. Inflation is almost 10% and the city of Palo Alto wants to impose higher taxes.

Live within your means, City.


Bystander
Registered user
Another Palo Alto neighborhood
on Aug 2, 2022 at 7:31 am
Bystander, Another Palo Alto neighborhood
Registered user
on Aug 2, 2022 at 7:31 am

This sounds more like it.

Saying this, I hope to hear more cost saving measures by the city that doesn't reduce services for residents. I would prefer them to reduce costs at the top, not the bottom, rung of the ladder. Can we do away with some of the pen pushers, fancy titles and endless studies done to no avail!

Thank you.


Local Resident
Registered user
Community Center
on Aug 2, 2022 at 9:34 am
Local Resident, Community Center
Registered user
on Aug 2, 2022 at 9:34 am

It's about time! Almost every other city in the Bay Area has a business tax. Palo Alto has 100,000 employees and 68,000 residents. Those employees and businesses consume a lot of city services. They need to pay their fair share.

Also, if you truly believe in affordable housing then I hope you support this. Everyone needs to pay for affordable housing including businesses that are the source through their rapid expansion in Palo Alto and elsewhere.


Online Name
Registered user
Embarcadero Oaks/Leland
on Aug 2, 2022 at 9:47 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Aug 2, 2022 at 9:47 am

Shane on Ms Cormack for preferring the Utility Transfer tas which impacts all of us who live here instead of a business tax opposed by her corporate backers like the SVLG, Chamber of Commerce and big tech who can't "afford" a measly business tax but willingly spend hundreds of millions of dollars lobbying against paying gig workers a living wage and/or benefits because residents are supposed to pick up the tab for housing for their workers and the homeless they create.

Be wary of anyone emdorsed by Ms. Cormack and the business bloc refusing to pay their fair share.

No on the Utility Transfer Tax. Yes on the Business Tax.


Palo Alto Resident
Registered user
Downtown North
on Aug 2, 2022 at 10:10 am
Palo Alto Resident, Downtown North
Registered user
on Aug 2, 2022 at 10:10 am

Cormack's behavior has been increasing disappointing (shameful?) as her time winds down. She is all-in on the corporate agenda, lined up side-by-side with Tanaka. Her view seems to be to tax residents and cut services, rather than ask businesses to pay 1% of rent starting 2 years from now!

That wing of the local Dem party (the Kniss branch) is pernicious. Most Palo Altans are supportive of both local and national businesses, but larger businesses need to do their share.


What Will They Do Next
Registered user
Old Palo Alto
on Aug 2, 2022 at 10:42 am
What Will They Do Next, Old Palo Alto
Registered user
on Aug 2, 2022 at 10:42 am

So we're in the middle of the Biden recession, Bidenflation, Biden surge in fuel costs aka the Putin price hike at the pump, Biden supply chain disaster and more. So what does the city want to do? More taxes on businesses that they will then pass on to the consumer. Yeah, that makes sense.
In the meantime, you can start writing checks to Palo Altans for the refunds you owe residents for illegally taxing us on utility gas costs. You've already got the 12.5 million set aside. Pay it out in one chunk now before you move it somewhere and blow it on some useless feel good boondoggle.


Consider Your Options.
Registered user
Another Palo Alto neighborhood
on Aug 2, 2022 at 11:38 am
Consider Your Options. , Another Palo Alto neighborhood
Registered user
on Aug 2, 2022 at 11:38 am

Palo Alto has roughly 68,000 residents, but our daytime population (including the people who commute in to work) is more than double that. Only a handful cities in the nation see a shift of that scale each work day. Our city staff has to support infrastructure to meet the utilities, transportation, emergency services and other needs of these businesses and their tens of thousands of employees. While I agree that the city could manage its resources better (There is always room for improvement.), it is important to accurately portray the size of the population the city serves.

This tax is moving toward something I can support.


peppered
Registered user
Community Center
on Aug 2, 2022 at 12:28 pm
peppered, Community Center
Registered user
on Aug 2, 2022 at 12:28 pm

Just what we need in over-taxed California to motivate more companies to ditch us and move to Texas. That way our beloved city services won't be strained, our restaurants won't have to deal with so many customers, we'll have all the parking we want, and most importantly, our elected officials will be able to spend freely on their pet projects.

Enough already. Just say NO, NO, NO.


Interested Reader
Registered user
Old Palo Alto
on Aug 2, 2022 at 12:33 pm
Interested Reader, Old Palo Alto
Registered user
on Aug 2, 2022 at 12:33 pm

To those claiming that this is the wrong time for a modest tax on businesses, keep in mind this tax takes two years to go into full effect - and recessions typically last 6-12 months (see Web Link

This tax would be between 1-2% of the rent on those large businesses - who already pay a premium to base themselves in Palo Alto - and stick around despite rents going up roughly 5% per year. And this would not impact the retail vacancies everyone cares about - this is a tax on the big folks in places like the Stanford Research Park.

And, this tax benefits those companies - they need Fire and Police protection, they need better public transportation and a reduction in local congestion, and they need more housing in Palo Alto so the people they want to employ can live closer to work.

This is a win/win.


mjh
Registered user
College Terrace
on Aug 2, 2022 at 1:14 pm
mjh, College Terrace
Registered user
on Aug 2, 2022 at 1:14 pm

For any company that leases space in Palo Alto this tax will ultimately be paid by the commercial property owner who may have to lower what they charge in order to remain competitive with other cities Almost all of whom already have a business tax!


Annette
Registered user
College Terrace
on Aug 2, 2022 at 3:28 pm
Annette, College Terrace
Registered user
on Aug 2, 2022 at 3:28 pm

We should have had a business tax years ago. And I think this one should be specific rather than general. The current Council will memorialize its intentions for how the revenue is to be spent. That's good and to paraphrase Burt: "Good luck getting re-elected if you don't stick with that plan". Assuming it passes, I've no doubt this Council and the next one will recall and honor the promises made about revenue from this tax. But what about 15 years from now if expenses exceed income and pension obligations are still not under control? Or we have a City Manager with an agenda that doesn't mesh with promises made 15 years previously? Will the 2037 Council abide by a 2022 Memo of Intentions or dip into the General Fund for purposes other than those promised today? A specific tax requires that the revenue be spent as promised. That makes sense to me.


Online Name
Registered user
Embarcadero Oaks/Leland
on Aug 2, 2022 at 5:43 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Aug 2, 2022 at 5:43 pm

@peppered, first off restaurants, hotels and most retail establishments are exempt from the tax. And its not as if the businesses cared much about sustaining the restaurants so they'd also go shopping when they were out to lunch since they lunched in company cafeterias that generated no sales tax revenue.

Restaurants BEGGED Palantir, Google etc to let local restaurants cater their cafeterias but were repeatedly told no, it was cheaper for them to work with the big food service companies.

Talk to local restaurant owners to validate what happened to their lunch business long before Covid.

The companies could easily have supported local restaurants and retailers AND paid for their employees to park in the city garages instead of in the neighborhoods, forcing residents to pay for parking permits. But no. Like the business tax, it's just never ever the right time for them to give back to the community.


Native to the BAY
Registered user
Old Palo Alto
on Aug 2, 2022 at 8:38 pm
Native to the BAY, Old Palo Alto
Registered user
on Aug 2, 2022 at 8:38 pm

@yawn. Every BA city except PA has realized the climate/humanitarian crisis at hand. PA is the West Coast version of Tulsa OK, 1928. Though PA did not actually burn down it’s buildings with residents then housed or their dwellings and biz, they enacted “redlining” rules that has consequently decimated 100 years of potential inclusion. (BTW NYC did this in 1970’s by burning out low income housing for its land value). So landlords currently deny low income, long time residents by shear rental/property “market rate” price. Substandard dwellings priced w inclusion of a 1990’s ceiling fan (or not)shared laundry, shampooed carpets, semi-new white non-energy star appliances, new linoleum (haha) ... No pets policy. Hard wood floors w no additional on site storage or parking, so little of it fetches a whopping $1000 more per square inch per 2B/1B unit a month. And must have 700 credit score $10000 in the bank, 3 times income to rent ratio, no eviction, no unpaid parking tickets, no kids, for a mere 800 sqft 2B/1B mid 1970’s near tear-down. $35-60 application fee. All while a pandemic has squandered our life savings moral fortitude, jobs etc. Absurd! Re address the City Charter! If BLM or Asian Hate or anti Semitic crime matters! It ain’t so hard. Yet. Let’s see. Hmm. An attorney, a realtor, tech wackies running for City council. Near 50 % of Palo Altanans are renting. Whether a $3000 or $10,000 a month property. And a single, lone council member who rents sits on the Dias!? Are we not outraged enough? Trump the epitome of bad lawyering and real estate ing his presidency, ripping out our rental HW floors for cheaply manufactured carpets. Is this not the town of the Grateful Dead, Jefferson Airplane, Joan Bias??? Protest songs, my square foot, cramped dwelling. Sounds like that era is just homegrown raspberry 1960’s jam? Oh yeah. Walk around your start ups, bare foot, Levi jeans and t-shirts with Truck’n on your AirPods, yet forget about your off spring and our future!


MargaretJ
Registered user
Greenmeadow
on Aug 3, 2022 at 3:01 pm
MargaretJ, Greenmeadow
Registered user
on Aug 3, 2022 at 3:01 pm

The role of the California municipality institution in providing the kinds of results people want has never been more in question. We face a time of often destructive hyper-partisanship and competing streams of influence...from valley water district to ABAG housing quotas, the California state authority has for the moment adopted a position at the extreme heavy government left in the hyper-partisan divide, leaving municipalities to respond as we will as increasingly the center authority in san francisco and sacramento have gone out on an extremist limb in directing our existence

We have to ask ourselves if we are to go along and be a compliant player in the state's political fashions of high taxes and big government, or to find our own way as a unique and forward thinking and self governed village.

Others point out the terrible timing of this new tax. Just after the twin hurricanes of covid lockdowns and disruptions, facing record inflation and recession.

what we need to ask is this: what is the city thinking in putting a whole new, and not insignificant burden on businesses at this particular time?

taxes can be for two reasons
1 because a government entity is in need of money
2 in the case of a specific group targeted by a tax, a government process has determined a certain group of people need to be punished

We oppose this initiative .. we oppose the expense and distraction of subjecting the voters to a vote for a special FAT tax targeting businesses that in these times will most certainly not pass. In days of awareness about the commute and our carbon footprint, we should wish not to chase businesses from working in Palo Alto. We see no reason that it is in our interests at this time to punish businesses in our town struggling just to survive. Please let wisdom be the order of the day, and do not force us to go to the ballot to reject this tax.


Eric Filseth
Registered user
Downtown North
on Aug 4, 2022 at 12:33 am
Eric Filseth, Downtown North
Registered user
on Aug 4, 2022 at 12:33 am

I wouldn’t use the exact language @margaretj did, but her notion of

(1) somebody needs the money

is basically correct. In the pandemic, City revenues fell about 20%, triggering the service cuts we all remember: Police, Fire, Libraries, Youth services, Art Center, others. Revenues, especially from visitors, have only partially recovered. The City used Federal Stimulus funds to restore services, but these are temporary; after that, the City either needs new revenues or else must cut services again. That’s the issue.

Her second point isn’t quite right. Nobody likes to pay tax, but it’s about appropriateness, not “punishment.” If (1) is correct and revenues are needed, where is the appropriate place to find them?

Over time, business employment in Palo Alto has grown much faster than population; yet business’ share of taxes to fund services has not. Business has added more of the people, but residents are paying more of the taxes. Two key causes are shifts in property taxes, and to non-sales-tax businesses like Tech and Enterprise Services.

In addition, the rapid influx of high-wage tech employees to Palo Alto and elsewhere has contributed heavily to the region’s inequality and housing woes - impacts which have fallen on communities. Residents alone cannot pick up these costs; corporations, especially Tech, must help.

Most other cities have business taxes; Palo Alto uniquely does not. This measure is modest: about half of East Palo Alto’s tax, small businesses pay nothing, and for large businesses would be a one-time fraction of most annual commercial rent increases.

Everyone benefits from stable basic services and housing; it’s never a good time to interrupt these. If voters choose this measure, the city’s top funding priorities are: permanently restoring Public Safety and other services; funding Affordable Housing and homeless services; and safe rail crossings, essential as Caltrain electrifies. If voters choose cuts instead, these things will be missed.


Online Name
Registered user
Embarcadero Oaks/Leland
on Aug 4, 2022 at 11:09 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Aug 4, 2022 at 11:09 am

Eric, all true. Palo Alto is paying the steep price for its over-reliance on and short-sighted support for commuters, hotel taxes and offices instead of residents and resident-serving businesses, even going so far as to support and allow "fake retail" sites like Institute for The Future that displaced real retail.

At the same time the City Manager's office is allowed to expand its staffing levels with too many very highly paid managers, assistant managers, etc. while the real resident-serving functions like police, fire and libraries keep getting cut.

While I support the business tax and condemn the business community for their constant song that "it's not the right time" because it's never the right time, let's hear some calls from Council for accountability.

Also, look at the surrounding communities of Redwood City, Los Altos, Menlo Park and others where their local businesses have organized events each week (and some twice a week) to bring people downtown -- all WITHOUT the city funding.

What's wrong with Palo Alto and its business community and wealthy residents? Why, for example, is the Chan-Zuckerbeg Foundation sponsoring the great Friday night concerts that attract thousands each week in Redwood City rather than in Palo Alto since they're Palo Alto residents? The owner of the Nature Galley, now happily on State Street in Los Alto but formerly of Town & Country and a Palo Alto resident, organized the very successful First Friday event where 12 bands play for free on 2 of the downtown main streets again at no cost to Los Altos taxpayers.


Bystander
Registered user
Another Palo Alto neighborhood
on Aug 4, 2022 at 11:48 am
Bystander, Another Palo Alto neighborhood
Registered user
on Aug 4, 2022 at 11:48 am

I have attended Parades in Redwood City, Fireworks in Mountain View, and a Chili CookOff in Palo Alto. This year the Chili Cookoff had no Chili. The May Fete used to be a big event with carnival atmosphere. Now it is an apology of a parade.

Palo Alto has very little community spirit compared to our neighbors. It shows that residents' needs are very low down the list of priorities. I spend more time out of town for recreation than I do in town. It is time to look at what makes this town thrive as a community rather than a dormitory where people just sleep, eat and work.


Native to the BAY
Registered user
Old Palo Alto
on Aug 4, 2022 at 5:19 pm
Native to the BAY, Old Palo Alto
Registered user
on Aug 4, 2022 at 5:19 pm

@margaret read my post “raise the tax!”

@EricFilseth Stimulus used to restore our services”? Please do line item ? You mean kept flushing our toilets, and improving the electric grid? Or what? I thought it was used for cost of living increases for highly paid city staff, like CM Shikada ! So much for together again!


Cat
Registered user
another community
on Sep 5, 2022 at 1:18 pm
Cat, another community
Registered user
on Sep 5, 2022 at 1:18 pm

“A generation ago taxes were split evenly between residents and businesses.” I can’t believe nobody is addressing the elephant in the room. Proposition 13.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 5, 2022 at 2:10 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 5, 2022 at 2:10 pm

Cat,

"I can’t believe nobody is addressing the elephant in the room. Proposition 13."

If the outcome of the recent business tax negotiation at City Hall is an indication, businesses are happy with Prop 13.

The residents side of the Prop 13 equation has some morbid justice. Residents die or move. I would imagine that the tax base from residents has probably gone up more than businesses over time but this should be coupled with the growing demands from jobs and businesses given water, transportation and grid issues. I guess it's a relief that some businesses are also moving and possibly dying. Maybe that will be the wake up call but in Palo Alto, businesses have declared that the community is not worth it to them.


Me 2
Registered user
Old Palo Alto
on Sep 6, 2022 at 12:11 pm
Me 2, Old Palo Alto
Registered user
on Sep 6, 2022 at 12:11 pm

Straight from the state: Did Proposition 13 Cause Residential Properties to Pay a Larger Share of Property Taxes?

Web Link

"Homeowners pay a slightly larger share of property taxes today than they did when Proposition 13 passed. Proposition 13 does not appear to have caused this increase."


resident3
Registered user
Another Palo Alto neighborhood
on Sep 6, 2022 at 1:22 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 6, 2022 at 1:22 pm

@Me 2,

“Homeowners pay a slightly larger share of property taxes today than they did when Proposition 13 passed. Proposition 13 does not appear to have caused this increase.”

The legislative analysis you posted makes it clear that the comment is not “all things being equal;” it suggests that more housing was built relative to businesses. Irrespective of taxes, homeowners also contribute above and beyond taxes to their own community for obvious reasons and businesses that do are an exception.


Edith Clark
Registered user
Crescent Park
on Sep 6, 2022 at 2:43 pm
Edith Clark, Crescent Park
Registered user
on Sep 6, 2022 at 2:43 pm

"Palo Alto has very little community spirit compared to our neighbors."

@Bystander...

Palo Alto residents joined for a BLM rally and End Asian Hate Crime gathering at City Hall. There was also a colorful street mural decrying police brutality following the George Floyd incident.

Parades and pageants along with chili contests are fine but they do not address real world issues and are merely there for entertainment. And there is nothing wrong with petty entertainment outlets.
To each his/her own.

I believe downtown Palo Alto still holds those tacky street fairs that are also held in Redwood City, Menlo Park, Los Altos, and Mountain View. This should suffice those who enjoy collecting street fair wine glasses and listening to cover bands.

The only thing missing is a Miss Palo Alto beauty pageant but it would probably raise certain controversies.


Me 2
Registered user
Old Palo Alto
on Sep 6, 2022 at 3:03 pm
Me 2, Old Palo Alto
Registered user
on Sep 6, 2022 at 3:03 pm

"homeowners also contribute above and beyond taxes to their own community for obvious reasons and businesses that do are an exception."

Care to be more specific?

My nitpicking on the report is that it takes in homeowners as a uniform entity when it's clear that people that have owned their houses since the 80's or earlier are being subsidized by people who have purchased their homes more recently.

It's the long-time owners of homes in our state that are not contributing their share of tax revenue. I wonder if the Residentialists are mostly these tax-evaders?


resident3
Registered user
Another Palo Alto neighborhood
on Sep 6, 2022 at 3:45 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 6, 2022 at 3:45 pm

@Me 2,

“It's the long-time owners of homes in our state that are not contributing their share of tax revenue. I wonder if the Residentialists are mostly these tax-evaders?“

With a median homeowner age of 30, add 40 years and you have people now in their 70’s. Unless you have an elder abuse program to evict this population earlier, your problem with this age group goes away (on average) in less than 20 years.

All the people who have purchased in recent years from the folks who have already moved or died, are paying higher taxes.

“Specifically,” the people in their 70’s made Palo Alto a desirable place for all the new buyers; whether they shopped locally, or built a company here. This makes me think that specifically for Palo Alto (not a state average), the numbers probably would add up where locals (not businesses) have made more investments in the community and the people in their 70’s are likely on fixed income.

At any rate your immediate grievances with residents could be over in a matter of 20 years (on average) but hell will freeze over before businesses let go of Prop 13.



Me 2
Registered user
Old Palo Alto
on Sep 6, 2022 at 4:53 pm
Me 2, Old Palo Alto
Registered user
on Sep 6, 2022 at 4:53 pm

"With a median homeowner age of 30"

Where are you getting your data? Median age of Palo Alto residents is 42.6. If your data is statewide, it speaks to the aging demographic and ossification of neighborhoods in Palo Alto.

"Unless you have an elder abuse program to evict this population earlier"

Paying your taxes is hardly elder abuse. Making more recent homeowners subsidize their taxes is crazy. How can one justify one household paying 100x in property tax of their neighbors for the same government services?

So what you're saying is that you actually support Prop 13?

"'Specifically,' the people in their 70’s made Palo Alto a desirable place for all the new buyers; whether they shopped locally, or built a company here. "

Ok boomer. Nice of you to forget all the even older folks that turned orchards into Eichlers or the younger folks that democratized technology into the palm of your hands. But go ahead and glorify a segment of the population that still laments that there's no bowling alley left in Palo Alto.

That doesn't justify the Prop 13 giveaway or the ossification of neighborhoods.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 6, 2022 at 6:26 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 6, 2022 at 6:26 pm

@ Me 2,

"With a median homeowner age of 30"

Median age of a person buying a home in the 80’s that you mentioned.

Not the median age of current homeowners.


resident3
Registered user
Another Palo Alto neighborhood
on Sep 6, 2022 at 7:07 pm
resident3, Another Palo Alto neighborhood
Registered user
on Sep 6, 2022 at 7:07 pm

@ Me 2,

"How can one justify one household paying 100x in property tax of their neighbors for the same government services?"

This may have to do with how expensive Palo Alto has gotten; something we can all agree on, and the need for more housing. btw 42.6 sounds old but it's far from the age group you mentioned, people who bought in the 80's. That's old.


Me 2
Registered user
Old Palo Alto
on Sep 7, 2022 at 11:41 am
Me 2, Old Palo Alto
Registered user
on Sep 7, 2022 at 11:41 am

"something we can all agree on, and the need for more housing"

Yes.


Local Resident
Registered user
Community Center
on Sep 11, 2022 at 2:05 pm
Local Resident, Community Center
Registered user
on Sep 11, 2022 at 2:05 pm

Palo Alto needs a business tax like nearly every other city in the Bay Area that already has one. It will help fund public safety, affordable housing and the Caltrains rail crossings. Please join us in supporting and learn more at: Web Link


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 11, 2022 at 5:58 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 11, 2022 at 5:58 pm

What a sloppy web site. Under endorsements, you've got current PUBLIC OFFiCIALS lumped under Community Supporters.


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Post a comment

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