AgdaPkt 2009-07-13 clsd and jnt - Laserfiche WebLink

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7C Page 1 ... . . . .. ." ... ... R.........E:..:P. ......:Q':..R..:....J.: .... -,' ... ..... . ," ',..' . . :' . ~. . '. " ~ .... . " .. : \ : . ". '. . . . . . .. . . ....". July 13, 2009 SUBJECT Proposed Revisions to Business License Tax Ordinance RECOMMENDATION 1. Introduce Ordinance No. adding Sections 32.156,32.157, 32.158, 32.159, and 32.160 to Division 6 of Article V of Chapter 32 of the Redwood City Municipal Code with respect to a Business License Tax. 2. Adopt a resolution authorizing submission of Ordinance No._ adding Sections 32.156, 32.157, 32.158, 32.159, and 32.160 to Division 6 of Article V of Chapter 32 of the Redwood City Municipal Code to the voters of the City of Redwood City at the Consolidated General Municipal Election of November 3, 2009. ,.}' 3. By motion, direct the City Attorney to prepare an impartial analysis with respect to Ordinance No. _ 4. By motion, authorize the Mayor and Vice Mayor to select such persons as necessary to sign the ballot arguments in favor of Ordinance No._. BACKGROUND The City's business license tax rates were most recently increased on July 1, 1994. The current version of the ordinance was adopted by Council in 1990 and called for 50/0 annual increases in the tax rates from 1991 - 1994. The ordinance provides for no increases thereafter. About 700/0 of the business license revenue is generated by businesses that fall into the "general business category." The current tax rates for this category are $37 per business plus $24 for each full-time employee and $12 for each part-time employee. If the proposed increase is approved by the voters these rates would increase to $59 per business plus $38 for each full-time employee and $19 for each part-time employee over a three year period. In November 1996 the California voters approved proposition 218 which amended the State Constitution to require voter approval of any new taxes and increases in any existing taxes. As a result of proposition 218 the City's business license tax rates have not increased since 1994. Earlier this year the Council Finance Committee met with staff from the Finance Department to explore alternatives for increasing the business license tax rates. Staff calculated that inflation, as measured by the changes in the San Francisco-Oakland-San Jose consumer price index (All Urban Consumers), has increased by about 50% since 1995. Applying this factor to the current estimated annual business license tax revenues of $1.3 million indicates that had the tax rates