News Digest | August 20, 2021 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - August 20, 2021

News Digest

City shifts gears on business tax

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Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Aug 17, 2021 at 3:22 pm

Online Name is a registered user.

Speaking of the utility tax, whatever happened to our checks from the two legal settlements? You'll recall the city's been "overcharging" us about $20,000,000 each and every year for the last 5+ years -- do the math! -- funnel money from us to fund their other spending on salaries, consultants, pet projects, etc. while continuing to charge residents more than businesses each tine they raise utility rates.

At a recent City Council meeting, they said they're planning a 3% utility hike of 3% this year and 5% more for EACH of the next few years. I guess that's on top of the $20,000,000 each year.

With that kind of money, I'm horrified that Ms. Cormack objects to charging businesses a tax that *might* raise $10,000,000 while leaving US to pick up the difference. Shame on her and shame on Mr. Tanaka for their knee-jerk support of businesses while residents continue to suffer from lack of services, especially closed or only partially open libraries.

A REAL business tax based is long overdue!

Posted by Allen Akin
a resident of Professorville
on Aug 17, 2021 at 3:33 pm

Allen Akin is a registered user.

Most of the negative consequences of too much commercial growth scale with the number of employees, rather than the size of their buildings, so I would rather have a tax based on employee count. I appreciate the practical difficulties involved in making that work, though. A tax based on building size is still a big improvement over no tax at all.

Posted by Citizen
a resident of College Terrace
on Aug 17, 2021 at 4:16 pm

Citizen is a registered user.

Way to go city council - drive out businesses and then there won't be these crazy demands for new housing! Problems solved through leftist economics.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Aug 17, 2021 at 5:33 pm

Online Name is a registered user.

@Citizen, are you aware that Palo Alto is the only community WITHOUT a business tax which the other surrounding "leftist economies" have long imposed.

Just curious how you'd characterize the literally hundreds of millions of dollars --($124,000,000 I think) that high tech companies like DoorDash spent in the last election lobbying against paying their workers even minimum wage with no benefits while paying their CEO $450,000,000+?

Posted by Bystander
a resident of Another Palo Alto neighborhood
on Aug 17, 2021 at 7:34 pm

Bystander is a registered user.

With remote working, a business can have large number of employees working anywhere other than Palo Alto and only needs a small office space for group meetings and a reception area to get a Palo Alto address.

The trend to get rid of cubicles and working in shared space was happening before the pandemic and now the pandemic has made remote working with only occasional or one day a week per department for office space. I would have said in the past that square footage was better than the number of employees.

Now I am not so sure.

Posted by chris
a resident of University South
on Aug 17, 2021 at 11:06 pm

chris is a registered user.

Making real estate more expensive for businesses will make building housing more attractive. If businesses leave, more acreage can be converted to housing.

Posted by Palo Alto Green
a resident of Duveneck/St. Francis
on Aug 18, 2021 at 10:42 am

Palo Alto Green is a registered user.

"Businesses continue to struggle to pay their rent, payroll and other operational expenses"

Large businesses are currently the most profitable they have ever been in American history. This includes the likes of Palantir and Telsa. As long as the tax is focused on office, etc... and not retail & restaurants, it's fine.

Time for Palo Alto to tax businesses like every other business on the Peninsula already is.

Posted by Consider Your Options.
a resident of Another Palo Alto neighborhood
on Aug 18, 2021 at 11:48 am

Consider Your Options. is a registered user.

Suggestion: Hotels already pay a TOT. Might we consider excluding them from this tax for that reason?

Generally, I do support a business tax. I'm not certain basing it on square footage is the best way to do it. Basing it on the number of employees businesses pack into their square footage may be more practical. Or it might be harder to measure.

How do we minimize impacts of smaller struggling businesses during the pandemic period--lengthened by the Delta variant, thanks to anti-vaxxers giving it a toehold?

Posted by Novelera
a resident of Midtown
on Aug 18, 2021 at 12:19 pm

Novelera is a registered user.

I work in a business in an accounting capacity. The work is construction. Our company pays what we call business licenses and what some of them call business taxes to every location where we have construction projects. This includes Atherton, Portola Valley, Hillsborough, San Francisco, San Jose, Los Gatos, Los Altos, Town of Los Altos Hills, Burlingame, and Salinas.

I have always wondered why businesses get off scot free in Palo Alto. Could it be campaign donations?

Posted by Citizen
a resident of College Terrace
on Aug 18, 2021 at 12:28 pm

Citizen is a registered user.

Just because other cities are taxing businesses doesn't make it a good idea. Just because businesses are earning a profit doesn't mean it is for someone else to take. Pat Burt brings up San Francisco. Is San Francisco such a great example? Rents are down 27% in SF, businesses are leaving and commercial office space subleasing there is soaring. Poop is on the streets, tracked by an app, while open air drug dens flourish and crime increases. Their municipal finances are in bad shape for lots of reasons. Sure, San Francisco is a great example to cite for Palo Alto - to do the opposite. Leftist economics at work.

Posted by Novelera
a resident of Midtown
on Aug 18, 2021 at 1:09 pm

Novelera is a registered user.

@citizen. You cited your view of dysfunction in San Francisco and leftist economics. Perhaps your eye went to your favorite target, San Francisco, and didn't observe that Atherton and Los Altos Hills, towns probably containing more registered Republicans than anywhere else in the Bay Area, also have a business tax.

Posted by David Jenkins
a resident of Stanford
on Aug 18, 2021 at 3:15 pm

David Jenkins is a registered user.

If the City of Palo Alto could actually demonstrate that it is proficient in managing additional taxpayer based revenue, maybe this tax assessment concept would have more favorable leanings.

As it stands, I wouldn't trust the city managing my kid's weekly allowance.

Posted by Citizen
a resident of College Terrace
on Aug 18, 2021 at 4:08 pm

Citizen is a registered user.

Maybe the City should scale back its spending and ambitions and live within its means. Businesses already do pay taxes. So do residents. After the City expanding to now tax businesses (again), who will they move to tax next?

Posted by Citizen
a resident of College Terrace
on Aug 18, 2021 at 4:14 pm

Citizen is a registered user.

@novelera just because Los Altos is doing it doesn't make it a good idea. Yet another government money grab in the highest taxed state, California. Highest sales tax, highest state income tax, etc. Cutting spending sounds like a good idea.

Posted by William Hitchens
a resident of Mountain View
on Aug 18, 2021 at 6:04 pm

William Hitchens is a registered user.

Employee count? Square feet? It's all the same thing in the end. Palo Alto already is an extremely expensive place in which to run a business thanks to inflated salaries, real estate prices & rent, and lots of other incredibly ignorant regulations to disrupt companies' abilities to run efficient, cost-effective businesses. If PA keeps piling on more stupid expenses and restrictions upon its best money-making enterprises, then they will move somewhere less ignorant and snooty to run their businesses properly; for their investors, their employees, and their customers. Poor Palo Alto.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Aug 18, 2021 at 6:51 pm

Online Name is a registered user.

It's not just Los Altos charging business taxes, it's also the city of San Jose, Mountain View, Santa Clara, Sunnyvale and so many more. Palo Alto is the rare exception that doesn't have a business tax; the business community objects to them when times are good, when tines are bad and when times are mediocre.

Somehow it's just never ever the right time for them to stop shifting the costs to taxpaying residents.

Posted by Citizen
a resident of College Terrace
on Aug 19, 2021 at 12:51 pm

Citizen is a registered user.

@Online Name:
Door Dash has had one quarter of profit in 8 years of operation. Guess they can't afford to pay what they are paying since they are unprofitable.

Both businesses and residents already pay taxes. Time for city government to live within its means, and if it can't, cut expenses, and dampen its ambitions. Already the most and highest taxed state.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Aug 19, 2021 at 1:50 pm

Online Name is a registered user.

DoorDash just spent about $124,000,000 lobbying against paying its workers a living wage, pays its CEO $450,000,000+ making him the 2d most highly paid exec after Palantir's and charges struggling restaurants usurious rates.

That one quarter of profitability was, I think, when they and Uber and Lyft were being subsidized by governments aka taxpayers like us. Now that the subsidies have ended, they've raised rates even more WITHOUT compensating their workers who've been striking because they can't even afford childcare. Remember that poor driver whose car was hijacked with his infant son inside??

I guess it takes a while to earn enough to offset the lobbying fees and the CEOs pay.

But DoorDash et al aside, I think highly profitable companies like Google and Facebook can well afford to pay their fair share rather than continuing to shift the burden to us, the residents, in the form of congestion, the cost of administering paid residential parking programs, funding programs for the homeless etc.

Posted by Citizen
a resident of College Terrace
on Aug 19, 2021 at 2:47 pm

Citizen is a registered user.

@Online Name - so glad you mentioned some should pay their 'fair share.' What does that mean, anyway? Who determines it, besides socialist sympathizers? Seems like we are all paying more than our 'fair share' in the highest taxed state in the nation. Not surprising it's hard to afford living here for many, yet the city proposes more taxes on businesses, which will lead to lower salaries or fewer jobs in exchange. Great job City!

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Aug 19, 2021 at 3:16 pm

Online Name is a registered user.

@Citizen, of course we're all paying high taxes. Housing keeps getting less and less affordable while companies like Google keep adding literally millions of sq feet of office space and 20 jobs of each housing unit, thus increasing competition for housing and causing congestion and other infrastructure stresses.

How much of a company like Google's business is generated locally and hence locally taxable? A company like Visa's Palo Alto offices? They're global companies, probably registered in low-taxed Delaware.

We do know that the burden of taxes has shifted from businesses to residents each and every year. Former Mayor Greg Schmid made an excellent presentation on that shift during a City Council meeting a few years ago it showed residents' share of taxes rising to 80% while commuters outnumbers resident 4:1.

Who bears the costs for the homeless? Residents. Whose utility rates rise the most percentage wise? Residents (check the latest proposal).

So who benefits from the aggressive growth of offices and the pressure to house those workers? Who benefits from shifting the tax burden from businesses to residents?

Posted by TimR
a resident of Downtown North
on Aug 19, 2021 at 3:36 pm

TimR is a registered user.

"...[R]emain at odds over what exactly it would fund." So, tax first, figure out how to spend the revenue later? Sounds about right for around here.

Posted by Me 2
a resident of Old Palo Alto
on Aug 19, 2021 at 3:41 pm

Me 2 is a registered user.

"We do know that the burden of taxes has shifted from businesses to residents each and every year. "

Not in my neighborhood. The neighbors that have been here 20-30 years have been paying less each year relative to inflation thanks to Prop 13.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Aug 19, 2021 at 3:44 pm

Online Name is a registered user.

TimR makes a valid point. No one would ever accuse Palo Alto of spending wisely or well. Instead of cutting top-heavy management staff. communications staff that STILL fail in their outreach and consultants, it cuts and/or threatens to cut resident-serving entities like the libraries.

When confronted with poorly performing employees and departments like the solar permitting fiasco, what does it do? It doesn't cut the poor performers; it double teams the inspections at twice the cost. When residents object to things like the Ross Rd roundabout, it hires consultants to tell US we're wrong.

Posted by Citizen
a resident of College Terrace
on Aug 20, 2021 at 8:11 am

Citizen is a registered user.

@Online Name
Glad to hear you agree that our dollars are not well spent by the city government. So why support them getting more of our dollars? Businesses that have to fork over even more taxes to our city will either lower salaries or hire fewer people, in exchange for our city having more dollars to spend. That's a bad tradeoff, imo. The city benefits from sales taxes from Stanford shopping center(!) among other revenue sources. Tighten your belt, city.

Posted by Name hidden
a resident of Downtown North

on Aug 23, 2021 at 7:34 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?

Posted by Leland
a resident of Crescent Park
on Sep 5, 2021 at 11:02 am

Leland is a registered user.

How can you expect to generate more revenue by increasing sf taxes. Business are leaving office spaces, people are zooming and not staying in hotels for meetings, and added taxes will simply ensure that these businesses will pick Mt View or elsewhere.

Implement a tax when the economy is strong and business is booming. The city has impeccably bad timing to raise taxes in the middle of a pandemic and economic meltdown. Now is NOT the time to discourage businesses from returning to Palo Alto.

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