News

Wednesday: Atherton weighs putting business tax hike on ballot

Neighborhood traffic plan also on council's agenda

Atherton's City Council is scheduled to decide on Wednesday, July 20, if it wants to put a ballot measure substantially increasing the town's business license tax on the November ballot.

The proposed tax would charge those that do business in Atherton -- such as real estate companies, contractors, alarm companies and gardeners -- a business license tax of 25 cents per $100 of gross Atherton receipts.

The new tax is expected to bring in around $800,000 more each year than the existing tax, which is a maximum of $250 a year. To pass, the measure would need approval by a simple majority, or more than 50 percent, of votes cast.

City Manager George Rodericks told council members at a July 6 study session that the tax would be paid by those who conduct business in town. "This is a tax that doesn't actually affect the residents themselves," he said.

Council members asked at the study session to exempt Atherton residents with home occupations.

But council members said there might be reasons to not hurry to move the measure forward.

"I am concerned about forging on ahead and putting this on the November ballot without some sort of polling data (showing) whether the residents would understand this and whether this would pass," Mayor Elizabeth Lewis said. "I don't think we can get 51 percent."

Mayor Lewis said she also wants "to quantify the number of residents this is affecting."

Council member Mike Lempres also urged caution. "Rushing to do this would be a mistake," he said. "We should be aware of how the public is going to look at this."

However, other council members pointed out that waiting a year to put the tax on the ballot would mean the town would lose a year of revenue

The July 20 council meeting starts at 7 p.m. in the council chambers at 94 Ashfield Road.

Also on the agenda is consideration of a neighborhood traffic management plan. If adopted, the plan will set out a series of steps that can be taken when neighborhoods express concerns about traffic. The plan is based on a similar Menlo Park plan.

None of the measures would divert traffic to other areas, and most of the measures would require the approval of a minimum number of nearby residents.

Comments

3 people like this
Posted by Joseph E. Davis
a resident of Woodside: Emerald Hills
on Jul 19, 2016 at 3:07 pm

If City Manager George Rodericks truly believes that these taxes do not "actually affect the residents themselves" he is unqualified to serve and should immediately resign.


3 people like this
Posted by Great idea
a resident of Atherton: West Atherton
on Jul 19, 2016 at 3:29 pm

Agree with you Joseph, this tax would affect the residents, but in a positive way. They would no longer have to bear the entire brunt of paying for the local government. Many of the contractors who profit on this town would need to pay their fair share. I support it wholeheartedly.


2 people like this
Posted by Placido Empero
a resident of Atherton: Lindenwood
on Jul 19, 2016 at 3:39 pm

I think Joseph Davis is saying that it should be obvious that business license holders will pass in their increased costs to their customers. So Atherton customers will indeed pay for any tax increase.


2 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jul 19, 2016 at 3:40 pm

Peter Carpenter is a registered user.

"Many of the contractors who profit on this town would need to pay their fair share."

And guess who they will pass that tax on to??


2 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 19, 2016 at 4:53 pm

Menlo Voter. is a registered user.

Great idea:

do you have any idea how business let alone the construction business works? Those increased license fees will be passed on to the residents.


6 people like this
Posted by Apple
a resident of Atherton: other
on Jul 19, 2016 at 6:47 pm

The town has a significant budget surplus. The town's key capital projects appear to have the funding they need to move forward. I'm curious why more tax revenue is needed. Could the money be used to reduce the parcel tax in future years? I would be all for that idea.

While I understand businesses will pass on any taxes in higher costs to consumers, few vendors vary their rates city to city based on each municipality's tax. If there is variation, it would be to charge a high tax outlier much more than to reduce rates for a city that has a very low tax. With that in mind, I can understand if Atherton wants to normalize their rate in line with its neighbors. It would be useful to know what nearby cities are charging for the license tax.


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 19, 2016 at 7:00 pm

Menlo Voter. is a registered user.

Apple:

it's not "normalized" and those costs are passed on by city, at least in the construction industry. The residents WILL pay for any increase in business license tax. At least from construction contractors, which is probably 90% of the business license tax collected in Atherton.


2 people like this
Posted by Question
a resident of Atherton: Lindenwood
on Jul 19, 2016 at 10:03 pm

As was pointed out by Apple, the town has a significant budget surplus and key capital projects appear to have adequate funding. Could this be an effort to raise money for the town center? I didn't see a rush on orders to pay $10 million for naming rights to Main Street Atherton.


2 people like this
Posted by Sigh
a resident of Atherton: West Atherton
on Jul 19, 2016 at 11:16 pm

A lot of nonsense going on here. While I understand the point of Menlo Voter, that taxing businesses may result in businesses passing on those taxes to their consumers, the same argument could be used to say don't tax businesses, period. But we do. As was pointed out, businesses often cannot pass on 100% of their tax burden to consumers due to the free competitive market.

But more simply, if the council members are concerned about the prospect of Atherton residents paying more taxes, how about they do what they promised to do: abate the parcel tax if it wasn't needed.

I know revisionist history on the part of some of these council members now says although there is a large surplus, the tax is still needed, but how about abate the tax, tax the businesses, and call it a wash if the businesses manage to fully pass that through back to the taxpaying residents of this town. I doubt they will (operative word is "fully"). If they can, it will be to residents doing construction work, which is a far cry from all the residents.

I think you can tell I believe residents are simply taxed too much in this town.


2 people like this
Posted by Greed
a resident of Menlo Park: Central Menlo Park
on Jul 20, 2016 at 1:48 pm

The wealthiest community in the nation that doesn't need the money (surplus) taxing Blue collar workers more ?
Most will pass the tax on to the client, others smaller companies will refrain from doing business in Atherton reducing the competition resulting in higher prices. And unfortunately non permitted work may increase to save cost.



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Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 20, 2016 at 6:43 pm

Menlo Voter. is a registered user.

Sigh:

Trust me. I've been in the construction business over 22 years, these costs will be passed on to residents. Atherton residents hiring contractors aren't hiring the "most competitive." They're hiring for quality. Quality contractors pass on these costs.


Sorry, but further commenting on this topic has been closed.

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