2024. 07.22 Speaker Cards-PC - Laserfiche WebLink

Browse Search

July 19, 2024 Hon. Mayor Jeff Gee and Members of the City Council City of Redwood City 1017 Middlefield Road Redwood City, CA 94063 RE: Agenda Item 7.A. - Business License Tax Dear Hon. Mayor Gee and Members of the City Council, For seven decades, the San Mateo County Economic Development Association (SAMCEDA) has been a leading voice for the economic engine that is San Mateo County. SAMCEDA believes in the power of a strong economy driven by an appreciation of what that engine provides to our ecosystem on the Peninsula. With the current state of the economy, everyone from city hall to businesses of all sizes in Redwood City are facing the same challenges with interest rates, inflation, labor costs, and the list goes on. SAMCEDA recognizes that the City of Redwood needs solutions and new revenue to help address a structural deficit, and we appreciate the work of City staff, the Finance Committee, and the Ad hoc Committee. SAMCEDA even supports a reasonable and responsible effort to modernize your current business license tax structure as evidenced by our partnership with City staff over the past two+ months to engage your businesses and provide feedback and data. Unfortunately, the current recommendation of $250 per employee in the Professional Services category and a $500,000 cap on total tax payments is unacceptable. These numbers lack any evidence of having listened to the businesses which have participated in this dialog since April 2024. SAMCEDA is cautioning every city manager and their city council members across San Mateo County attempting to place a modernized business license tax on the November 2024 ballot that there is a “tipping point” at which any city goes too far in balancing its budget on the back of its business community – often the largest businesses – because that seems easy, and voters may agree. SAMCEDA has been tracking these efforts across San Mateo County and what we are hearing from our members, other medium and large sized businesses, commercial property owners, financial institutions, and commercial leasing brokers is consistent, concerning, and should be understood in Redwood City. You have heard this same feedback in your listening sessions, and it cautions that if you go too far and hit the tipping point: • Your existing businesses might leave • Your existing businesses might stay, but expand elsewhere • New businesses looking for a home will avoid your city In a post-pandemic environment, office vacancy rates and available Class A office space between San Jose and San Francisco means there are plenty of options in cities with more affordable business license taxes. And the line item for local business taxes is being carefully considered before any new office leases are signed.