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City Council Adopts Business Tax Expenditure PlanNEWS

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Seeking to give Palo Alto voters some reassurance about how funds from the city’s proposed business tax will be spent, the city council this week released funds into three categories: transportation, housing and public safety. passed a resolution pledging to allocate

The resolution, which the council passed by a 6-to-1 vote and was opposed by Greg Tanaka, was one of the major criticisms coming from the business community leading up to the council’s decision to impose the tax earlier this month. is intended to deal with in the November poll. Since this is a general tax, the income goes to the general fund, so the city has wide discretion over how that money is spent.

The Silicon Valley Leadership Group and the Palo Alto Chamber of Commerce have called on the council to pursue a special tax to explicitly direct funds to specific projects. However, he would need a two-thirds majority to pass such a bill, and the hurdles recent polls suggest are likely too high.

To settle the disagreement, the council agreed to keep the tax bill as a general tax, but passed a companion resolution stipulating how the funds would be distributed. This is the same approach that the council took when it raised the hotel tax in 2012, and the proceeds from this action will go to infrastructure priorities such as a new fire station and the recently completed bike bridge across the United States. was instructed to be used only for projects located in Route 101 and the New Public Security Building currently under construction.

The resolution is not legally binding and Congress can technically shift spending priorities, but at a recent meeting several Congress members pointed to the city’s experience with the hotel tax and warned that this would not happen. Guaranteed. Mayor Pat Bart said the city is sticking to the spending plan outlined in the hotel tax resolution, despite changes in the composition of the council and the city’s economic situation.

“Frankly, when this kind of explicit commitment is made to voters, if future councils do not follow through on that commitment, we wish voters luck with other demands,” Burt said Aug. “And frankly, if you’re an elected official and you don’t deserve it, do your best to run for re-election.”

A business tax that is based on area and exempts all businesses with less than 10,000 square feet of space is expected to generate about $9.6 million annually. According to the resolution, a third of these revenues will be spent on transportation and “safe train crossings”. The resolution states that Caltrain’s electrification efforts will add more trains to the corridor, so the city must change his four flyovers and separate them from train priority roads. . This is a project known as an overpass.

The city has been discussing flyovers for over a decade and is currently narrowing down design options for the intersection of Charleston Road and Meadow Drive. Last year, the council agreed to pursue the design of a so-called “partial underpass” at the intersection of Churchill’s Avenues. Work on the northernmost crosswalk on Palo Alto Avenue has been postponed to allow the area to be analyzed as part of a broader downtown plan.

The council’s resolution reads, “It is estimated that the improvements required at each intersection will require an average investment of $250 million.” “City funds will be used as matching funds to secure additional county, state, and federal funding for these investments in transportation infrastructure.”

Another third of the proceeds will go towards affordable housing. The resolution states that “substantial investments are needed to ensure housing costs are affordable for many middle-income people working in the city, such as teachers, public security officers, and workers in the trade and service industries.” increase. The city donated his two loans of $20.5 million towards Wilton Court. Wilton Court is a 59-unit apartment development for low-income and disabled individuals currently being built by Alta Housing at 3705 El Camino Real. With several affordable housing developments currently going through the qualification process, the council looks to its role in helping fund these projects and take advantage of state and federal funds.

The remaining third goes to public safety, an area that saw cuts early in the pandemic as local revenues plummeted. During his year, the city council has restored service and added police and fire positions. In doing so, however, he has relied heavily on his one-off sources of funding, such as the city’s Budget Stabilization Reserve. According to the Department of Administrative Services, the city’s current spending plan only funds these positions for two years, after which the city will need other sources of funding. We are committed to the council to use business tax revenues to stabilize.

“Rising costs and revenue constraints are limiting the city’s ability to provide public safety services, including police, fire, 911 and emergency services, at the levels desired by the community,” the resolution said. “Stable, long-term income from the business tax will put these high-value city services on a sound footing for the future.”

As part of a compromise with critics of the tax bill, the city council also agreed to issue an annual report detailing income from the business tax and expenditure of the city’s tax revenues.

The Council approved the resolution on the “Consent Calendar.” This is reserved for non-controversial items and is approved without discussion. Tanaka, who has consistently opposed the tax, was the only person to vote against the resolution. He said he disagrees with the city’s plan to allocate the funds.

“We should pay more taxes to those who actually pay them,” Tanaka said. “There should be a stronger nexus.”