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On July 22, the Redwood City City Council will discuss in its weekly session whether or not the proposed changes to the business license tax in the city are approved with the aim of maintaining the essential services through increased revenues and reducing the tax burden on smaller businesses.
Changes to the Business License Tax, the city said, would help reduce a persistent $9 million annual deficit.
The proposal was made pursuant to 20 meetings held with the business community, residents and other stakeholders to explore the modernization of the city's Business License Tax, where important comments were obtained to restructure the tax proposal, the city council said in a statement .
Based on this feedback, the proposed changes to the Business License Tax were updated. The new proposal preserves the current approach of charging businesses based on the number of employees in Redwood City rather than their gross revenue in the city; However, the structure has been adjusted to reduce the proportional tax burden on small businesses, he noted.
The complete proposal and general information will be provided with the City Council agenda package for the July 22 meeting, which has already been posted on Thursday, July 18 and is available by visiting the site www.RedwoodCity.org/CouncilMeetings.
Key elements of the proposal include:
- Continue to base business tax on per-employee rates, with different rates depending on business category (such as retail/commercial, contractors, services, and professional services). By charging different rates for different categories of businesses, we can reduce the regressive nature of the current tax structure.
- Maintain current per-unit charges for residential rental properties without rate changes, while ensuring that deed-restricted affordable housing units remain exempt from the tax.
- Maintain current square footage-based charges for commercial rental properties, increasing rates to those common in nearby cities.
"We believe this approach will balance the many interests the city has heard, including ensuring the business community pays its fair share to support Redwood City services while continuing to foster a business climate that is competitive with other cities," the city council explained. .
The City Council will consider the updated proposal on July 22 in Council Chambers (1017 Middlefield Road) at 6:00 p.m. Residents can participate in person (including by providing live public comment) or view the meeting online.
The city council stated that it is important to note that the role of the City Council is to decide whether to present a ballot measure before voters to update the Business License Tax; so the city does not make the final decision on the changes.
If supported by the City Council, the measure would be on the November 2024 ballot for consideration by Redwood City voters.
The city noted that, like many communities in California and the Peninsula, the economic consequences of the COVID-19 pandemic permanently reduced funding for services and ?sIncreasing revenues will require deep budget reductions?.
In that sense, he detailed that these reductions would degrade services prioritized by the community, including public safety, street and sidewalk maintenance, and flood control.
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