News

City prepares trio of new taxes

More business tax revenue needed for transportation upgrades, City Council says

Lacking the money for an ambitious list of transportation upgrades, Mountain View officials are hoping the city's new generation of businesses can pay for it.

City officials plan to study three separate tax measure options that could go before voters as soon as next November. The measures could include a surcharge on future marijuana sellers, a new per-employee fee aimed at the city's largest companies, and an increase on local hotel fees intended to capture Airbnb and other short-term rentals.

At a meeting earlier this month, City Council members signaled support for studying and possibly conducting polling for all three tax measure options. Extra tax revenues will be needed, they said, for an upcoming series of costly capital improvements, such as a new automated transit system and a series of grade separation projects along the Caltrain line.

The tax on large employers like Google would be the most complicated of the three options, involving a comprehensive update of the city's business license fees to put higher fees on large employers that draw heavy commuter traffic, according to city staff. This measure would likely borrow from similar policies in other South Bay cities with per-employee fees, such as San Jose and Sunnyvale.

Earlier this year, San Jose updated its business license fees to charge companies with more than three workers up to $60 per employee as part of their license fee. If Mountain View adopted similar rules, it would generate about $3.2 million annually, according to staff estimates.

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Large tech employers are generating much of the local traffic, so using this pool of money to pay for transportation improvements seems logical, said Councilman Lenny Siegel. He pushed for bringing forward a tax measure on the November ballot.

"2020 will be too late," he said. "Mountain View is really growing, and I want to see us building a lot of housing -- we need it -- but if we don't do something about the traffic, then we're going to lose support for the housing."

Siegel hinted that officials of one of Mountain View's "major employers" had actually expressed support for the proposed fee in private talks with him.

It remains unclear exactly what this proposed fee increase would mean for smaller businesses like retailers and restaurants. The standard business license fee in Mountain View currently costs about $30 per year, but the fee hasn't been updated in more than 30 years.

Council members emphasized they would perform an outreach campaign and gather input from local business owners before moving forward with the plan.

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Another proposed idea for a future tax would be to raise the so-called transient-occupancy tax, which is basically a surcharge on hotel stays in the city. Mountain View now charges a 10 percent fee on hotel lodgings, but most other South Bay cities have pushed their rates higher. While they prepare a voter measure to raise the hotel fees, city staff said, they could also study expanding the tax to cover the surging local market for Airbnb and other short-term rentals

A past investigation by the Voice found that the city is forfeiting about $1 million in annual revenues by not imposing hotel fees on about 800 Airbnb rentals in the city. City legal staff say they lack sufficient authority to charge the fees, but they have also declined to follow the example of nearby cities by allowing Airbnb to set aside those taxes until formal regulations are drafted.

"Now is the time to get Airbnb taxed -- we're leaving a lot of money on the table," said Councilwoman Pat Showalter.

A tax on future marijuana dispensaries in Mountain View also received council member support, although officially the pot industry is still prohibited in the city. Earlier in the same meeting, the council decided to place a temporary ban on dispensaries opening in the city, which could be extended through 2019. City staff say that time will be needed to fully prepare policies and regulations.

Despite that delay, discussions of a future marijuana tax indicated that Mountain View would eventually allow pot dispensaries in the city. Sean Kali-rai of the Silicon Valley Cannabis Alliance urged the city to consider using some of the taxes to help pay for treatment and "adverse impacts" of marijuana legalization.

For any of the tax options, city officials would need to decide whether to specify a use for the revenues. Under state law, tax measures with a specific purpose, such as paying for transportation improvements, are required to get support from two-thirds of voters. Unspecified tax measures that go directly into the general fund need only a simple majority to pass.

Councilman Chris Clark suggested that the city should play it safe. He said a tax measure could be written to suggest various possible uses without requiring that the revenues are spent on a specific project.

Mountain View's three potential tax measures could have some company on the November ballot. The Mountain View-Los Altos High School District is also considering a bond measure for November. Meanwhile, the Silicon Valley Leadership Group and the Bay Area Council are pushing for a regional transportation tax, which could join the same ballot.

For Mountain View, "three measures on the ballot is something to be cautious about," warned City Manager Dan Rich. "But we can explore it."

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City prepares trio of new taxes

More business tax revenue needed for transportation upgrades, City Council says

by / Mountain View Voice

Uploaded: Fri, Dec 22, 2017, 8:49 am

Lacking the money for an ambitious list of transportation upgrades, Mountain View officials are hoping the city's new generation of businesses can pay for it.

City officials plan to study three separate tax measure options that could go before voters as soon as next November. The measures could include a surcharge on future marijuana sellers, a new per-employee fee aimed at the city's largest companies, and an increase on local hotel fees intended to capture Airbnb and other short-term rentals.

At a meeting earlier this month, City Council members signaled support for studying and possibly conducting polling for all three tax measure options. Extra tax revenues will be needed, they said, for an upcoming series of costly capital improvements, such as a new automated transit system and a series of grade separation projects along the Caltrain line.

The tax on large employers like Google would be the most complicated of the three options, involving a comprehensive update of the city's business license fees to put higher fees on large employers that draw heavy commuter traffic, according to city staff. This measure would likely borrow from similar policies in other South Bay cities with per-employee fees, such as San Jose and Sunnyvale.

Earlier this year, San Jose updated its business license fees to charge companies with more than three workers up to $60 per employee as part of their license fee. If Mountain View adopted similar rules, it would generate about $3.2 million annually, according to staff estimates.

Large tech employers are generating much of the local traffic, so using this pool of money to pay for transportation improvements seems logical, said Councilman Lenny Siegel. He pushed for bringing forward a tax measure on the November ballot.

"2020 will be too late," he said. "Mountain View is really growing, and I want to see us building a lot of housing -- we need it -- but if we don't do something about the traffic, then we're going to lose support for the housing."

Siegel hinted that officials of one of Mountain View's "major employers" had actually expressed support for the proposed fee in private talks with him.

It remains unclear exactly what this proposed fee increase would mean for smaller businesses like retailers and restaurants. The standard business license fee in Mountain View currently costs about $30 per year, but the fee hasn't been updated in more than 30 years.

Council members emphasized they would perform an outreach campaign and gather input from local business owners before moving forward with the plan.

Another proposed idea for a future tax would be to raise the so-called transient-occupancy tax, which is basically a surcharge on hotel stays in the city. Mountain View now charges a 10 percent fee on hotel lodgings, but most other South Bay cities have pushed their rates higher. While they prepare a voter measure to raise the hotel fees, city staff said, they could also study expanding the tax to cover the surging local market for Airbnb and other short-term rentals

A past investigation by the Voice found that the city is forfeiting about $1 million in annual revenues by not imposing hotel fees on about 800 Airbnb rentals in the city. City legal staff say they lack sufficient authority to charge the fees, but they have also declined to follow the example of nearby cities by allowing Airbnb to set aside those taxes until formal regulations are drafted.

"Now is the time to get Airbnb taxed -- we're leaving a lot of money on the table," said Councilwoman Pat Showalter.

A tax on future marijuana dispensaries in Mountain View also received council member support, although officially the pot industry is still prohibited in the city. Earlier in the same meeting, the council decided to place a temporary ban on dispensaries opening in the city, which could be extended through 2019. City staff say that time will be needed to fully prepare policies and regulations.

Despite that delay, discussions of a future marijuana tax indicated that Mountain View would eventually allow pot dispensaries in the city. Sean Kali-rai of the Silicon Valley Cannabis Alliance urged the city to consider using some of the taxes to help pay for treatment and "adverse impacts" of marijuana legalization.

For any of the tax options, city officials would need to decide whether to specify a use for the revenues. Under state law, tax measures with a specific purpose, such as paying for transportation improvements, are required to get support from two-thirds of voters. Unspecified tax measures that go directly into the general fund need only a simple majority to pass.

Councilman Chris Clark suggested that the city should play it safe. He said a tax measure could be written to suggest various possible uses without requiring that the revenues are spent on a specific project.

Mountain View's three potential tax measures could have some company on the November ballot. The Mountain View-Los Altos High School District is also considering a bond measure for November. Meanwhile, the Silicon Valley Leadership Group and the Bay Area Council are pushing for a regional transportation tax, which could join the same ballot.

For Mountain View, "three measures on the ballot is something to be cautious about," warned City Manager Dan Rich. "But we can explore it."

Comments

NEWS FLASH
Registered user
Old Mountain View
on Dec 22, 2017 at 10:32 am
NEWS FLASH, Old Mountain View
Registered user
on Dec 22, 2017 at 10:32 am
12 people like this

It is expensive to live in Mountain View. *cue shock, disbelief, and outrage*


Otto_Maddox
Registered user
Monta Loma
on Dec 22, 2017 at 2:38 pm
Otto_Maddox, Monta Loma
Registered user
on Dec 22, 2017 at 2:38 pm
82 people like this

We're just squishy piggy banks.

What does a business owner get by paying for a $30 business license?

How about we spend less money? I know, crazy thought.


Hmm
Another Mountain View Neighborhood
on Dec 22, 2017 at 8:30 pm
Hmm, Another Mountain View Neighborhood
on Dec 22, 2017 at 8:30 pm
59 people like this

We know the counsels solution for traffic, more bike kiosks. :) A total and utter failure.

Lenny, how about solving the traffic issue before building more houses? Lets put the carrot before the horse, not the other way around. I guess common sense does not prevail when you have newbies hollering for more housing.


Anke
North Whisman
on Dec 23, 2017 at 6:11 am
Anke, North Whisman
on Dec 23, 2017 at 6:11 am
15 people like this

"a new per-employee fee aimed at the city's largest companies, ...

The tax on large employers like Google"


Finally our city officials do something that helps the citizens of Mountain View. Let's charge Google $1,000 a month per employee and use the money to help teachers, school staff and other local workers who've been pushed out by Google. Google has been making enormous profits at our expense for long enough, and they'll have more money than ever with the new tax bill. It's high time they contribute a little bit to help fix the mess they've made.


SRB
Registered user
St. Francis Acres
on Dec 23, 2017 at 8:09 am
SRB, St. Francis Acres
Registered user
on Dec 23, 2017 at 8:09 am
27 people like this

re: business license fees,

The problem is not the $30 / year fee charged for very small businesses (some with no payroll and run from home) but that the fee goes up to only $100 / year for a large employer with hundreds or thousands of employees in one location. Almost any of our neighbors has a better balance (Palo Alto doesn't even levy a fee on businesses with less than one full-time employee) and generates far greater revenues.


psr
The Crossings
on Dec 23, 2017 at 2:38 pm
psr, The Crossings
on Dec 23, 2017 at 2:38 pm
49 people like this

They want to tax us again, yet sell our water to Palo Alto? That's rich.

I wouldn't vote to give this pack of irresponsible people another nickle, no matter what package they wrap their request in. They have shown over and over that all they care about is packing more people in so that they have more money to spend on programs that they have no business spending money on in the first place.

Pat Showalter wants to make sure she gets to tax AirBnB, yet doesn't care that we don't want a lane of El Camino taken away so empty buses can drive there. Both she and Ken Rosenberg misled people on this issue to get elected. I simply don't trust either of them to do what they say. Perhaps the council could begin to spend less rather than tax more. Be good stewards of the money you have before you have the nerve to ask for more.


Mike
Old Mountain View
on Dec 24, 2017 at 5:48 am
Mike, Old Mountain View
on Dec 24, 2017 at 5:48 am
10 people like this

Mountain View's self destruction continues apace.


Airbnb
Rex Manor
on Dec 24, 2017 at 1:29 pm
Airbnb, Rex Manor
on Dec 24, 2017 at 1:29 pm
13 people like this

There are 80 known airbnb rentals 8n Mountain View? How many unknown? There are three newly renovated homes in my neighborhood that sit completely empty, probably purchased by investors. Why was none of this discussed during all the arguments for rent control? Maybe we don't need more housing, maybe we just need to require people buying houses in Mountain View actually use them for the housing they were designed for. Big fines for airbnb rentals and big fines for leaving a house empty without a valid reason. This will add more housing without having to build and build. I know the numbers are small, but we need to get more efficient with the housing we have now before building more and more.


Resident
another community
on Dec 24, 2017 at 3:00 pm
Resident, another community
on Dec 24, 2017 at 3:00 pm
20 people like this

First of all, they need to end the obsession with "getting cars off the road". The problem is too many people, not too many cars.
If congestion is so bad, abolishing HOV lanes (which have never been proven to work) will only help alleviate it.
Experiments like double HOV lanes are the reason congestion is so exacerbated.
The true solution is to limit immigration.
A recent study showed that even as people leave the area, they are being replaced twice as fast by immigrants. I love immigrants (I am one) but they (the "best and brightest") shouldn't all be concentrated in the Bay Area and brought at such a rapid pace to work at Google and Facebook.
Blaming single-occupant commuters is so irrational because they form the majority of commuters, and they have to get to work on time. Time is precious.
The root cause of the monstrous congestion is overpopulation, not SOV's.


YIMBY
Another Mountain View Neighborhood
on Dec 24, 2017 at 8:18 pm
YIMBY, Another Mountain View Neighborhood
on Dec 24, 2017 at 8:18 pm
9 people like this

@Resident

Be the change you want to see.


Bob
Registered user
Monta Loma
on Dec 25, 2017 at 5:21 am
Bob, Monta Loma
Registered user
on Dec 25, 2017 at 5:21 am
25 people like this

I think it's funny how every politician seems to think they can tax their way out of problems. "If we only had more money we could fix anything" is the answer for everything in their minds?

People, your biggest problems are affordable housing and traffic congestion. Why?
I'll give you a hint.....TOO MANY PEOPLE in one place trying to get to work at the same time.
Why don't the politicians give a tax break instead(Oh that's like the bad word to them) to companies for employees that telecommute and work from home. Most of the high tech workers can do their job from home and be more productive.

Yea, Tax breaks as incentives Vs. Taxes for infrastructure. Oh, I forgot.. Money makes the world go around.


How are We Better Off?
Cuernavaca
on Dec 25, 2017 at 4:15 pm
How are We Better Off?, Cuernavaca
on Dec 25, 2017 at 4:15 pm
29 people like this

So, exactly how is MV benefitting from all of the commercial (and residential) growth? You'd think we'd be seeing an influx of city revenue, leading to the city and residents seeing a city with lots of improved amenities.

But that's not happening. The commercial growth has NOT led to:

- New and improved parks
- Improved transportation networks
- Reduced taxes/fees for residents
- Improved/new police/fire/libraries
- Signficantly paying down the pension liabilities, which will someday lead to massive budget cuts for services to residents.

How would things have been worse if we hadn't developed so much throughout town - North Bayshore, San Antonio, El Camino? The day-to-day lives of those who live here have only seen adverse impacts - crowded streets, packed schools, never-ending construction disruptions, etc.

Where's the evidence that Mountain View is better off from all this growth? If we'd "frozen" development (commercial and residential) 10 years ago, would we be worse off than today? I mean, geez...I'm willing to endure some daily pain if there's a benefit somewhere, but where is it?

If there's no upside, why participate? This applies to commercial (and subsequent residential aimed at "rectifying' the imbalance). We can't reverse the damage done, but we can get off the train (and maybe try to settle in with a calmer, more well-thought out plan for our community). Not every city needs to have multiple tech headquarter buildings and 100,000 residents.


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