Measure U is for You

Business License Tax and Measure P – Let’s Not Confuse the Issues

On the ballot for the General Municipal Election this November 5, 2013, our voters will find two initiatives which ask us to approve increases that intend to provide necessary financial resources for our community.

One measure has been placed on the ballot by the City of Foster City to request an amendment to the original business license tax. Another has been placed on the ballot by the San Mateo- Foster City school district for a bond that will be used to improve school facilities. While both are notable, they each affect voters differently and are worthy of separate and disparate treatment and analysis. It is important to separate these measures so that they can receive your support on their individual merits.

Foster City is one of the best places on the Peninsula to live and play with fantastic parks and recreation amenities, high quality and responsive police and fire departments, well-maintained roads, levees and lagoons, etc. in large part due to the contributions made by the business segment of our community and the taxes they pay which are applied to the essential services our City is able to deliver.   

The City needs to modernize its approach to growth and policies regarding rising costs of maintaining the services that provide each of us with the quality of life we have come to expect. We have tasked staff to sharpen their pencils and to cut all non essential services and personnel. Cost cutting measures are no longer sufficient.  Staff and our policy makers have now too been required to identify  fees and licenses that have not been adjusted and which are in need of update. 

The City’s business license tax has not changed since 1972, even while the cost of providing services has increased. Moreover, the types of businesses in Foster City and how they operate has changed significantly impacting future demand and posing threat to reliability.

This is an anomaly, in most areas of business and real estate; the escalating costs are captured and adjusted using the consumer price index. This CPI is used to increase to cost of goods and services as well as lease and rent increases to businesses. The City has strived to defer the levying of a tax until absolutely required which is why the City has not adjusted the business license tax previously.  Now, as we look ahead, in order to maintain the level of service our businesses have become accustomed to and to protect the essential services delivered to all those who live, work and play here, it is critical to move to a model that is more financially sustainable. 

The Chamber of Commerce has been engaged with the City over the proposed changes to the Business License Tax since January.  Over the course of several months, the Assistant City Manager and the Chamber President/CEO have met with the Chamber of Commerce Board of Directors and a sampling of businesses in one-on-one meetings to discuss the potential impact(s) the proposed changes may have on our business community.  After reviewing the proposal with businesses of varied size and kind, the “Chamber believes the model proposed is reasonable and that the interests of the business community have been taken into consideration.”

In concert with the business community and the Chamber of Commerce, we can bring the business license tax into the 21st Century by increasing the minimum tax amount and the maximum tax amount over a 3 year period.  We can then make sure the tax keeps up with the times by allowing the maximum tax amount to change with inflation. I ask that you vote “yes” to approve the amendment to the business license tax as proposed and understand the value the business community plays on the experience we as residents enjoy due to their contributions.