Search The Tattler

Wednesday, May 4, 2011

Business License Tax: Fortnight of Back Room Deals

Residents Must Wait Two Weeks For A Decision
Will The Council Let The Citizens Decide On Taxes?  

Last night the Emeryville city council voted to postpone for two weeks, a decision over the idea of a business license tax ballot initiative so Pixar/Disney and other large corporations can have time to negotiate more advantageous back room deals with the city staff.  At Pixar's request, the 4-1 (Nora Davis dissenting) council vote gives Emeryville's largest corporations two weeks longer, after more than a year of wrangling about the issue, to lobby the staff regarding the tax raising plan.

At issue is whether the residents should be allowed to vote in November on the infamous business license tax cap; whether it should be done away with and whether the tax rate should be raised.  The tax as it is now puts a cap on taxes owed for any gross income over $146 million and is unique in the entire Bay Area.  Formerly, the city had estimated a revenue enhancement of millions of dollars annually if the cap were to be raised.
The cap now effects only three businesses in town , including Pixar.  The highly regressive tax cap has the net effect of making the small businesses in town pay much more in taxes than the largest businesses.  The existing tax rate, above and beyond the cap, is .08%; also lower than what the neighboring cities charge.

Pixar Threatens City
Should Emeryville's taxes be similar to
other Bay Area cities?
Should the people decide?
Pixar's attorney last night warned the council to "slow down" and urged them not to make a decision yet, raising concerns that the whole tax increase ballot initiative is rash and needs to be more though out, regardless of the previous year of debate about the issue in the council chambers.  Further, the specter of litigation was raised by Pixar when council members were warned that they should take a step back "before this thing becomes divisive".

'Oops, We Made A Mistake!'
Eyebrows were raised when Karan Reid, the city's chief financial officer revised the previous estimations for the city's take from a license cap lifting from millions of dollars annually to now only $152,000 per year.  This is a result of the largest businesses revisions in their reports to the city.  Apparently, now Pixar has found many exemptions and deductions to their gross income, lowering dramatically the amount they would owe in the event that the residents vote to lift the cap.  Pixar, being one of three businesses effected by the tax cap lift would presumably only owe some $50,000 according to the newly revised numbers.  One resident noted last night however if the amount Pixar would owe is now so small, why are they fighting lifting the cap so vigorously?

The Chamber of Commerce announced they are not supportive of allowing the residents to vote on the issue.  Chamber president Bob Canter told the council not to let the rabble put Emeryville at risk.  Emeryville needs to keep everything just as it is to keep and attract business to Emeryville, he said.

The issue is now to be voted on May 17th by the council so Pixar has time to push their interests in the back rooms at City Hall.

1 comment:

  1. I watched the process on television. The Walt Disney representative arrived just before the discussion on this tax. Nice to get the say so as to when to turn-up. Having this item on the agenda so late in the evening is another example of minimizing resident input. Thank you Brian Carver for staying the course!

    It's hard to sit and watch the meetings, with Bob Cantor shaking his head "yes or no" to Nora Davis, or gesturing which way to vote on certain issues. Same behavior takes place at the Finance Committee. When did one "out of towner" living in Martinez get to run our city and have a rent free space for years? We fought hard to get rid of corruption in the 80's. Now we need to fight to protect the rights of the residents and small business owners over powerful corporate lobbyist and attorneys. These companies make more profit in a week then they would ever pay in taxes. We are still paying for redevelopment give-aways to them and will be for some years. How about some reciprocity and social consciousness from big business? But no, they are busy getting, amongst other things, their property tax reviewed so that they don't have to help support the county or state. Don't tell me, they will also say they are patriotic and caring companies. This is disgusting and predictable behavior from corporate giants. And if the city staff have their way, this item will not make it to the November elections for residents to vote on.