Election 2018: Bay Area Cities to Vote on Taxing Big Business

San Francisco, Mountain View and East Palo Alto have all placed measures on the November ballot that would tax big companies to fund new housing and infrastructure projects. Proponents of the taxes argue something must be done to address the region’s low housing stock, growing inequality and crumbling infrastructure. Opponents say companies will leave the Bay Area if the cost of doing business here keeps rising. We’ll hear about the measures that could pit cities against powerful tech companies.

Guests:
Guy Marzorati, reporter, KQED’s California Politics and Government Desk
Lenny Siegel, mayor, city of Mountain View
Jim Wunderman, president and CEO, Bay Area Council

San Francisco Proposition C

“This would really target companies that are bringing in over 50 million dollars. This is an increase in the gross receipts tax at about an average of a half percent. And smaller companies would pay less, bigger companies pay more. And then the city’s biggest companies would pay this through a payroll tax.” – Guy Marzorati

“The federal government gave [companies] a huge cut in the corporate tax rate from 35 percent to 21 percent. These companies now have a huge amount of cash on hand. At the same time we’ve seen the federal government not invest in housing at the urban level. And so the proponents of these measures and Proposition C in San Francisco have said it’s going to be up to these companies and the money that they have on hand to solve our local problems.” – Guy Marzorati

“We have a new mayor London Breed. She wasn’t involved in the creation of Prop C. Neither was any member of the Board of Supervisors. I think it would make a lot of sense to actually have our elected city leaders be at the forefront of setting policy, and if it involves taxes, a conversation with all of us about how to go at a problem we all want to solve.” – Jim Wunderman

Mountain View Measure P

“In Mountain View [Measure p] would be kind of a head tax on the number of employees that a company has. It’s on a sliding scale, depending on the size of the company.” – Guy Marzorati

“They look at the influx of business and tech companies as something that has really clogged traffic in the city, made it hard to get around. So while this tax taxing Mountain is not specifically targeted, this will be going towards the general fund, the idea, and what city leaders have promised, is that if it passes they’re going to spend this on transit projects.” – Guy Marzorati

“In Mountain View traffic or the weakness of our transit infrastructure doesn’t just affect the residents it actually affects our employers. The biggest threat to our economy in Mountain View is not taxation, but the difficulty in getting people to work.” – Lenny Siegel

“The tax proposal from a dollars perspective is actually very modest. So I don’t think on the numbers, that it’s going to be a huge influence on Google or anyone else to do anything differently. … The concern that I have is that as a city doing this, it’s like the camel’s nose under the tent. What happens to the neighboring city, what does Sunnyvale do, what does Santa Clara do, what does Palo Alto do? Maybe the next city won’t be modest in doing this.” – Jim Wunderman

East Palo Alto Proposition HH

In East Palo Alto we’re talking about a commercial office space parcel tax. So we’re actually talking about commercial development. – Tonya Mosley

“Measure HH in East Palo Alto, more than any of these measures, shows the confidence that local officials are having in the economy. There is no anchor company in East Palo Alto like there is with Google in Mountain View, Twitter in San Francisco, Apple in Cupertino. They’re basically going ahead with this tax without having an anchor company there with the confidence that it’s not going to dissuade companies in the future from moving in.” – Guy Marzorati

“I think it’s shortsighted. I understand the attraction is we get money in right away, we tag the real estate people who seem like they’re really wealthy and they could afford to do this. But I think when you analyze it, it’s all about competition. It’s all about comparative economics. And businesses have to really look and plan for the future: Where do we want to locate? Where do we want to grow? And I think there’s a lot of opportunity in East Palo Alto and this sends a very negative signal.” – Jim Wunderman