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Council Approves Business Tax Increase

The council took the initial step toward getting tax measures on the fall ballot.

The City Council of Redwood City Monday night unanimously approved moving forward with a plan to increase both the city's .

The council plans to ask Redwood City residents to approve both the taxes during the November election, in an effort to cope with the $2.6 million deficit the city is facing, and which is expected to increase to over $4 million in coming years.

According to Finance Director Brian Ponty, last night's approval was the first step necessary in the process toward getting the tax measures on ballot for the fall elections. Under the council's decision, the city staff will return to the council again in June for formal adoption.

Should voters approve the tax hikes, the city's current $37 business license tax would increase to $59 over a three year span. Additionally, fees to business owners for full-time employees would increase over the same span to $38 from the current rate of $24. Additionally, the fee for part-time workers would increase from $12 to $19 over the same time period.

After the three year lifetime of increases, both taxes would rise annually based on the consumer price index.

And under approval from voters to hike transit occupancy tax, or hotel tax, would increase from 10 to 12 percent.

In all, the taxes are slated to generate $1.5 million annually if approved, according to a city report.

The tax increases are part of the city's budget balancing plan, which also includes getting concessions during labor negotiations with employees' unions and well as finding more efficiencies in spending, according to Ponty.

Ponty said the as well as the downtown business group supported the proposal to increase the taxes.

But Councilwoman Barbara Pierce said the city staff should do more community outreach to small businesses to rally support for the taxes.

"As you look around downtown, there are small businesses that aren't thriving," she said. "And we need to be helping them to understand the situation, and what we are doing to work with them."

Mayor Jeff Ira ensured Pierce that outreach process has already began, and that it will intensify as the June deadline for formal approval of the tax increase proposal approaches.

Councilman Ian Bain said he would campaign independently for the tax. City Council members are restricted by law from gaining support for the tax while using city funds. 

Councilwoman Rosanne Foust added there has not been an increase tothe  businesses license tax in 17 years. And that even if the hikes are approved, the increase would be spread out over a three year span, and would only make Redwood City's tax rate competitive with surrounding Peninsula communities.

She said one of the city's great challenges in getting the taxes passed will be to make the community understand how important the potential revenue that stands to be generated would be to Redwood City.

"We have to show why we are doing this for the long term health of the community," said Foust.

M. K. May 25, 2011 at 02:25 PM
I closed my company in Redwood city last year afetr 17 years and put 7 people on the unemployment line. One of the reasons was the ever increasing business taxes and fees at both the State anf local levels...Company vehicle fees, personel fees etc. This move just shows us that the people hired or elected to operate our cities are poor managers of the resourses left in thier control...If the City and County want to get the economy moving on a local level they should offer incentives to attract business that hire people who in tern buy homes, products, and services localy and not tax them to do so! They should even try joining the counties that allow base property tax transfers between counties and get thier realestate market on the up-swing, which in turn, will generate the property taxes and other revenue required to run this place. Hmmm, now why didn't they think of that? Good luck, I moved out and have taken my business elsewhere. Marc K.
Linda Jolley May 25, 2011 at 09:06 PM
The government folks running Redwood City are so very st000pid that giving them more money is like throwing it in the bay. They attack people: [1] unjustified parking tickets on poorly-marked Pennsylvania Avenue behind the library [2] paying cops to search cars at night to make sure no homeless person gets a night's sleep [3] Ruining the library with guitar concerts and other noisy activities, so that children and others may no longer count on quiet study areas. You can bet that the deficit comes from BAD GOVERNMENT -- government that kills instead of helping, and government that covers its asteroids by printing new money that drives prices upward. I say this: fire a buncha stooopid bureaucrats, cut off funding for library noise and killing and persecution of the homeless, and LOWER TAXES! Linda Jolley, landscaper and activist.

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