Council Moves Sharply Against Emeryville Residents

July 19, 2011: Democracy Dies At City Hall

City Council: Emeryville Citizens Are Too Stupid To Decide For Themselves

We Are The Law, Says Council
Tonight, the Emeryville city council revealed the months of City Hall backroom dealing with Pixar and other large businesses has paid off handsomely for the business community.  In a shocking and brazenly undemocratic vote,  tonight the city council moved to protect Pixar's interests and voted to disallow the citizens a ballot initiative in November whether the infamous business licence tax cap should be eliminated as they previously said they would.  Pixar, which would have seen a tax hike up to normal Bay Area rates with a tax cap removal had publicly threatened the city with "rancor" if they did not get their way.  It's unknown what they told decision makers in the closed room meetings at City Hall.

In another startling anti-democratic move, the council tonight also voted to disallow the citizens to decide for themselves whether the City Attorney should be replaced.  Council member Ken Bukowski warned his colleagues that the petition to place the decision on the November ballot was in the process of being certified by the County Registrar of Voters but the rest of the council moved forward anyway to head off a citizen vote in November.

The Tattler will be covering this remarkable anti-democratic turn of events in coming days as we uncover more facts.

In Back Rooms, Pixar Warns City; Residents However Must Operate In The Open

Back Room Finagling Happening Right Now At City Hall

City Will Face Resident's Wrath If Business Tax Cap Remains

Opinion

Faced with the biggest budget shortfall in modern Emeryville history, the city council recently turned to investigating increasing taxes after having massively cut government services.  Once their gaze was directed to the revenue side of the ledger, it didn't take long to see the glaring 800 pound gorilla residing in the business tax code: the business tax cap.  Not only does Emeryville have the lowest regular business tax rate (.08% of gross receipts) in the region, it's also the only city in the entire Bay Area with a business tax cap.

The tax cap is a huge tax break for the biggest businesses that the smaller businesses don't get; it renders all gross receipts over $146 million tax free, meaning these large corporations never pay any more than $114,000 per year, leaving billions of dollars untouchable.  The net effect of all this give-a-way to the billion dollar corporations is that the smaller businesses, the businesses that the residents find useful and neighborhood serving, pay a much higher rate than their well connected billion dollar corporate counterparts do.

Paul Ryan has a plan for America

and Pixar has a plan for Emeryville.
Both involve the rich not paying their share.

Emeryville has the unfortunate distinction of having the most regressive taxation in the entire Bay Area.  It's enough to make Wisconsin Congressman Paul Ryan and the Republican Party blush.

After the council floated the idea on May 3rd that perhaps the tax cap could be lifted by a November ballot initiative vote of the people of Emeryville, Pixar/Disney went apoplectic and they brought in their hot shot corporate lawyers and laid down a barrage of intimidation on our little city council.   Pixar it would seem, likes the tax cap.  The council withered and agreed to have city staff meet with the lawyers in private meetings to reach some kind of accord.  These back room meetings are finishing up and on Tuesday, the council will reveal how much the Emeryville residents will be allowed to vote on in November.

Given the state of our budget crisis with all its cutting of services and shelving of public amenity plans, the tax cap sticks out like a sore thumb; a government give-a-way plum to the richest among us.  The cap goes beyond way the rhetoric of trying to attract and retain business to help Emeryville's bottom line, the low .08% tax rate does that more than enough.

Will the city council feel
Pixar's pain?

The cap is much more than that; it smells of a regime of pro-big business ideology from an era when our backs weren't against the wall as they are now.  Emeryville's business tax cap is just unfair by any metric and its time has passed.

Woe be to any politician that bends to the will of Pixar and stands in the way of the people's will.  Tuesday will tell.

Regressive Business Tax: City Council Is Complicit

City Council's Defacto Claim:

Emeryville Is The Worst City Around, And Now We're Desperate Too

Opinion
We don't rate, we're not worthy, we're terrible, why would anyone want to do business in a city as bad as Emeryville?
This has been the unstated but clear mantra from the city council manifest by the business license tax scheme it has championed for many years.

Business taxes in Emeryville are low...really low.  The low tax rate is further exacerbated by the infamous cap on taxation for all business income over $117,000 the city council has shepherded for the last several years.  No other city in the entire Bay Area has even remotely such a generous tax scheme for business, especially big business.
The only conclusions that can be reached as to why taxes are lower by an order of magnitude are two-fold: 1) The city council believes that Emeryville is so bad that we need to give away the store to have any chance to attract big business here or 2) they are pro-business ideologues. Either conclusion is unacceptable for us, the residents.

If the council only wanted to help attract business to our town, they could have simply offered the lowest tax rate, but to pile on the tax cap, worth millions of lost dollars, is something else altogether.

Now. against this backdrop,  the council would like to raise taxes to offset the terrible financial crisis at City Hall.  The message is that even while we're such a bad place for business to locate that we need to give ridiculously generous tax breaks for big business, also now we're desperate.

As the city council decides whether to place on the November ballot, a change to this irresponsible tax regime, residents would be wise to disregard any attempts to politicize this by any council members running for re-election also in November, as surly they will.  They'll tell us they support business paying their fair share.  But we must remember as we go to the polls, it is they that delivered to us and protected the current tax scheme.  We should bear in mind that the city council has let slip through our hands, hundreds of millions of dollars over the years in service to their absurdly pro-business tax scheme.

Here's your new park

While you read their coming re-election campaign literature, you should think about all the money lost due to this extreme tax code they are responsible for and all the parks they say they want and all the bicycle infrastructure and other amenities and how we now don't have the money for them.

Higher Taxes For Big Business: Finance Committee

Move For Biggest Businesses To Pay More

Infamous Business License Cap Might Be Lifted

Tuesday night the Finance Committee sent a recommendation to the city council to allow Emeryville voters to decide if  the much maligned business license tax cap should finally be rescinded.  The meeting, held at City Hall and well attended by business owners and residents alike, was also intended to decide about whether the actual business tax rate should be increased as well as a possible tax exemption for small businesses.  The committee decided to pass to the council, all three recommendations for their judgement.  If the council  OKs the recommendations, probably at a May meeting, then the residents will have the final say in the form of a November ballot initiative.

At issue is primarily the lifting of the tax cap; long a point of contention for small business owners and residents alike.  The current law places a cap or upper taxable limit on all business income at $117,000.  Any income over that amount is tax free.  Emeryville stands alone in the entire Bay Area with its tax cap law as no other cities have any cap on taxable business income.
The law effectively makes small businesses pay much more than large businesses.
The city council majority has long defended the cap stating Emeryville is such an undesirable place for businesses to locate that the city needs to create extremely generous tax incentives to attract the largest businesses here.  It is noteworthy however that economic conditions are such that those council members, formerly defenders of the tax cap, are now entertaining the idea of lifting it.

As the law is currently written, even for business income below the cap, Emeryville's taxation is far lower than its neighbors at .08% of gross receipts.  Oakland's rate is .12% while Berkeley sets their rate at .18%.  Neither of the two neighbors places a cap on taxable business income.
The committee said the council will decide if the voters will be able to set a higher rate as well as lifting the cap, possibly in two separate ballot initiatives.

The staff recommended the committee reject a proposal to waive tax fees for businesses with less than $100,000 gross receipts.  City finance chief Karen Reid claimed no other cities in the Bay Area past or present waive fees for small business;  however Emeryville itself waived the business license tax for small business as late as 1999.  That law, extant for 12 years, was overturned by the council after its author, former council member Greg Harper left office in 1999.

NOW They Want To Make The Business Taxes More Progressive

Opinion/Analysis

How much money have we lost in Emeryville because of unwarranted and rigid ideology on the city council?

As the realization of our terrible fiscal bind grows, once sacred pro-business tax code ideology is starting to crumble. Even corporate maven and City Councilwoman Nora Davis uttered the unthinkable at a budget study session last week, "we need to look at raising revenue in all areas, including possibly lifting the cap on the business license tax," she said. A surprising statement since the existing tax structure, enacted by Ms. Davis and her colleagues, has limited our city's ability to pay for needed services for years. Indeed, our city has the lowest tax on business, by far, in the entire Bay Area. They are also heavily regressive, falling disproportionately on small businesses, while giving the city's biggest firms a huge break.

Business taxes in Emeryville let the largest corporations off the hook by "capping" the tax. Once the maximum amount of $115,774.03 is reached, all profits above the amount are fully exempt, even for a firm with multi-million dollar profits. As a proportion of overall income, large businesses pay much less per dollar than smaller business. Effectively, small business has been subsidizing large business in Emeryville for years. Small businesses have complained about the unfair nature of the business tax, but they have been rebuffed by the Chamber of Commerce and the Chamber's friends on the council.

Emeryville resident and college professor Brian Carver has been alerting fellow residents of the absurdity of our tax code. In a letter to the city council, he demonstrates how unprecedented the cap is; no other city in the entire Bay Area has it. He has showed if the cap is lifted, even a little, millions in revenue would be gathered for our cash strapped city. According to his analysis, the burden would be very affordable for Emeryville's largest businesses.

The unfair tax structure in Emeryville is no accident. It a product of the city council's rigid ideology. Some argue that lower business tax can serve a city well but obviously this is not the case. To forgo so much revenue is reckless. We need to finally get our financial house in order and stop being a pariah on the Bay Area stage. One would be right to shake one's head and wonder how many millions of dollars we have given up due to this dogmatic policy and how that money could be used right now.