Emeryville "Leaking" Millions of Dollars
Emeryville mayor Jac Asher raised more than a few eyebrows at City Hall at the last January Council meeting when she used the normally business friendly and innocuous mayoral State of the City annual address to promote the notion that the City fundamentally change its governing system to capture millions of dollars in business property tax proceeds that now goes uncollected. The existing 'General Law' governing model would be replaced with a more democratic governance system called a 'Charter City', a move that would allow residents more say in how the City operates and allow City Hall to capture business property transfer tax money now lost, a "leaking" of proceeds the mayor says. It's a change we need to make to fund more parks and public infrastructure maintenance such as sidewalks she said in her address to the City. In the wake of the recent demise of funding from Redevelopment Agencies state-wide, it's a change our neighboring municipalities including Oakland and Berkeley have made, bolstering their general fund coffers.
Transfer taxes are collected by cities when businesses change ownership or merge, a method initially made popular after Proposition 13 stripped California cities of crucial property tax revenues, now increasingly so after Redevelopment funds have also gone dry.
Emeryville Now Loses $3 Million Per Year
To become a Charter City requires a majority vote of the residents and in the case of Emeryville, nothing of substance necessarily need to change at City Hall with the exception of capturing these heretofore unpaid business transfer taxes.
The mayor noted that with the current General Law provisions in place, Emeryville only yielded $157,000 in 2009 to 2014 on business transfers. That's $.55 for every 1000 dollars of real estate value compared to our charter city neighbors Oakland and Berkeley who yielded $15.00 per 1000 dollars of value. It has meant a loss of an average of $3 million per year for Emeryville over that time.
Emeryville stands alone in it's retention of the General Law status in the region. Cities throughout the region have changed over to Charter City status to net these business transfer monies, using them to fund amenities for their residents. Here's a breakdown of some local cities and their capture of transfer taxes:
- Alameda $12.00 per thousand on full value
- Albany $11.50
- Berkeley $15.00
- Emeryville $0.55
- Hayward $4.50
- Oakland $15.00
- Piedmont $13.00
- San Leandro $6.00
Mayor Asher called the Charter City question a "way forward" after the loss of the Redevelopment Agency and all the fiscal woes visited upon Emeryville without that formally copious revenue stream.
Video courtesy of the Emeryville Property Owners Association:
I have questioned the general law versus charter city for many many years. residents should vote on the mayor and not have them appointed by the city council. I support mayor asher and would like to be the first in line to sign the ballot initiative drive.
ReplyDeletehow much would the marketplace have generated if they paid $12 instead of $.55?
also, the traffic impact fees and developer fees paid to the school district should be audited and enforced.
ReplyDeleteThe $3 million estimate that we lose each year is just that: an estimate. When the Watergate Towers were sold or when the Marketplace changed hands these were multi-million dollar transactions that, depending on what other transfers occur in a given year and the rate we select, could easily amount to MUCH MORE than $3 million in a given year. It's not like you can move a giant skyscraper out of town, either, so there's no sense in which this threatens Emeryville's business base. Businesses cannot find such a sweet deal in Berkeley or Oakland either, so Emeryville is, once again, just rolling over and shoveling money into the pockets of business that it desperately needs to spend on its infrastructure and on services for residents. Sign me up for a Charter City!
ReplyDeleteSounds like an excellent plan! Why haven't we done this before? Our business friendly City Council Majority is apparently why. Councilwoman Asher should lead the fight for this change.
ReplyDeleteRichard Ambro
Since when is more taxes a good thing? I don't really like to hear that this would be a competitive tax to meet surrounding areas. Emeryville is way too efficient at spending our money in a wasteful mindless manner. If you look at the Emeryville pie chart, the massive chunk is being spent on the package deal of present and past employees while on the other hand, parks and sidewalks are only crumbs in this pie. I just don't see or expect things to change with the addition of more taxes. Shouldn't our city be more involved in saving taxpayers monies instead of extraction? The bottom line is that a transfer tax on property comes out of our own pockets; it is not free money.
ReplyDeleteThe levying of taxes is a good thing in that it is a necessary ingredient to create a livable community. There are two great forces needed to make a civilization: public interest and private interest. Neither force alone can create a civilization and both are inherently inefficient. But only one of these forces is your proxy...your agent; and that is the public sector. To throw our civilization over to forces not in the public interest will not turn out to make a livable community. If Emeryville taxation is on par with our neighbors then there is a level playing field and business will have to contribute their fair share.
DeleteWhen are more taxes a good thing? Well, one direct example would be the America the World War 2 generation built from the '30's through the '60's. That's when the highest marginal tax rate on the wealthiest Americans was never below 70%, spiking to 93% in the 1950's. During all those years is when we built the great American middle class. It's when we had the most egalitarian shared wealth and when our economy was growing at prodigious rates, 4-6 or 7% GDP growth. All done with extremely high taxes on the wealthy. This inconvenient fact sticks in the craw of the business class but it serves well to answer your question. Taxes are a necessary and good thing when they are applied with an overriding philosophy of 'ability to pay'. Those with the greater ability to pay are those who should pay. This is how a just and civil community/society is built. We should not cut off our nose to spite our face. Taxes need to be extracted (from business) more in Emeryville.
I stand opposed! We don't need to be a Charter City, and we don't need to give more money to this "institution" of local government, that spends. Emeryville is simply too small to be something it isn't. Who the hell are we, anyway? We had a High School, bought and paid for. Now we got nothin but an expensive construction project, and the spenders have recently departed. That's because they were not playing with their own chips, and they were smart enough to see the futility. God help us! Our leaders are misguided, and we are getting the shaft.
ReplyDeleteI say "NO" to the Charter City, and the Transfer Tax! Let's get some real perspective.
Emeryville has fixed its sidewalks and streets and even built a few parks with money via business tax increment financing through the former Redevelopment Agency. The Redevelopment Agency is now dead and gone; declared illegal. Are we now to give up on fixing sidewalks and streets let alone building more parks? Because of some abstract ideology? How are we benefitted by this thinking? We like sidewalks.
DeleteI agree, but I think the city already has the money to buy land for parks and to maintain sidewalks, and they just choose not to spend it on residents. I beleive the city is just in a habbit of wasting our money on overpriced contractors and its own city employees. I can't beleive no one in our city council is ready to call this into question. This new tax is not only for business. It will be levied on every resident who buys and sells any property in Emeryville. I don't trust that the extra income derived from this tax will be spent wisely.
DeleteThe City of Emeryville has $6 million in its general fund. The Capital Improvement Program listed $200 million in wish list projects (until recently, now scaled down). There's a $120 million debt left over from the Redevelopment Agency that must be paid. It'll be paid off over many years by tax increments from the development it funded but that means no money for the general fund for huge swaths of the town. This city is basically broke.
DeleteAll of Emeryville's sources of income equal the amount they spend on employee's (about 30 million). I don't think it makes sense to raise taxes when the money is already there. The allocation is what the problem is. For example: If Mr. Businessman's spends all his profits on his employee's wages, he would be out of business very soon. If he then goes ahead and raises prices to stay in business, he better have a good product because people ain't stupid.
DeleteThe one flaw in this plan should be obvious to any reader: this is a REAL ESTATE transfer tax, and will not only apply to businesses - it will apply to all real estate transactions. Residents will shoulder the bulk of the new tax, folks.....
ReplyDeleteWe're $120 million in debt from the left-overs of the Redevelopment Agency. So you want the party but don't think the piper should be paid? Emeryville is broke. But we can't raise revenue like every other city in the Bay Area does? I don't see the logic here. Is it nihilism?
DeleteNext up will be a brand new Emeryville style "parking and citation center" extraction of your hard earned money in the name of "Berkeley and Oakland make millions from it". We're broke, let's steal.
DeleteYou answered my question about nihilism with your 'taxes are theft' comment. Thank you.
DeleteI'm the OP. I didn't say I was against or for it in my post. I just think that everyone should know that this is not only about businesses, it will affect people's pockets directly. Typical way to sell a tax in Emeryville: mislead the public into thinking that the businesses will pay it and the people won't be affected....
DeleteI agree that our School District leadership has been misguided and spendy with our tax dollars, but that's really a totally separate issue from what goes on at City Hall and, more specifically, what goes on when a piece of property in Emeryville changes hands. This transfer tax is one line item that shows up in the giant document you sign when you close escrow on a property. At that point in the transaction everyone expects this line to be there, and in our neighboring cities, it brings them significant resources. Buyers and Sellers can negotiate who pays it or split it however they like, and it has no negative impact on the rest of us not transferring our properties. But the positive impacts will be palpable: a new source of funds for important city-wide improvements. Redevelopment is gone and it's time to find ways to fill that gap. A transfer tax comparable to our neighbors' is an outstanding idea!
ReplyDeleteHow much of your own chips are committed here? Probably nothing. I completely disagree. Emeryville needs to proudly stand on its own, and stop looking for hand outs. It will continue to thrive, even if dormant for a few years, just because of it's strategic location. Let's just try to pick ourselves up, dust ourselves off, and WORK HARD to right the ship. We have the capacity to do that. But, our leaders can't see that.
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