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Google pushes city to first place in county tax growth

Mountain View now leads the county in property tax growth, and it's almost entirely because of Google's rapid expansion here, says county assessor Larry Stone.

"I'm not so sure I've seen such a significant impact in one year from a single company, ever," Stone said Monday.

Driving the increase is a massive purchase of office equipment and furniture by Google -- to the tune of nearly a half-billion dollars.

The resulting increase in Google's overall assessed value makes it the second-largest company in the county, behind Cisco, said David Ginsborg, spokesperson for the assessor. Last year it was the third largest.

Stone says that for the first time since 2008, nearly every city in the county is seeing an increase in property tax revenue in this latest assessment roll, "the first concrete evidence that the Silicon Valley economy is finally heading in a positive direction," Stone said in a press release.

Mountain View's tax roll growth is the largest among the county's cities, growing by 6.56 percent over the year, while the county overall increased 3.25 percent. The next highest tax roll growth came from Cupertino, at 6.35 percent, and Santa Clara, with 6.15 percent. Palo Alto had 5.32 percent growth.

In Mountain View the increase can be attributed to a 30.3 percent rise in "unsecured" or business personal property values, such as major purchases of machinery, equipment, computers and fixtures by companies. Cupertino and Santa Clara also saw big increases, while Palo Alto saw a 10 percent decrease. "That's all furnishing in big buildings," said Ginsborg, of the assessor's office.

"The growth of business property is perhaps the best indicator that businesses are once again hiring new employees, leasing office space, and making major purchases," Stone said.

And 80 percent of the unsecured property tax growth in Mountain View is from Google, Ginsborg said. The value of the company's unsecured property went from $652 million to $1.1 billion over the last year.

"It's very impressive, the kind of impact a single company can have," Stone said. "It's very much like the impact Apple had on Cupertino a decade or so ago and probably what Hewlett-Packard had on Palo Alto a couple decades or so ago."

But while tech companies may be growing like crazy, the economy hasn't lifted residential values to the same degree. There was an increase in Mountain View single-family home values of 5 percent, but 20 percent of homes in Mountain View saw a decrease in value," Ginsborg said. In the county overall, 27 percent of homes were devalued.

"Things happen in Silicon Valley first and fastest, good and bad," Stone said. "You are seeing the good part of it. And it goes down very rapidly. The dot-com bust had a significant impact on Silicon Valley all at once. We're essentially a one-industry region."

Comments

Posted by James, a resident of Whisman Station
on Jul 6, 2012 at 4:16 pm


Our home's assessed value jumped 20% since last year. I expect this is also due to the Google effect, plus interest rates don't seem to be finding a bottom due to the Fed's QE?


Posted by Doug Pearson, a resident of Blossom Valley
on Jul 6, 2012 at 9:45 pm

I am heartened by the fact that Mountain View's assessed values are increasing more rapidly than Prop 13's infamous 2% rate, i.e., property is actually being bought and sold, but I am disappointed that so much of the increase is due to an ever-increasing Google impact. I don't like to see Mountain View becoming a company town, but better that than continuing decline.


Posted by Steven Nelson, a resident of Cuesta Park
on Jul 7, 2012 at 8:51 am

The Google impact will affect the schools in different ways than the City (i.e. Shoreline District). The Shoreline "infamous 0% rate" insures education (and County) General Funds will be guaranteed 0% of the assessment increase [the infamous "tax Increment" mechanisms of redevelopment districts]. HOWEVER, the education facilities bonds can be paid off with increased revenues from the increased BOND assessments [we live in such odd government times!]. The assessments affect both BOND and Prop 13 (1% limit) tax receipts - but only BOND revenue flows directly to education.
Any Google purchased 'unsecured' business property (or real property) that is bought OUTSIDE of Shoreline generates 100% of the full tax rates for education and the County General Fund. (i.e. it is not diverted or restricted and can be used for either salaries, class size reduction, maintenance - or - building.) IMO, it is to our community advantage if Google expands outside of Shoreline District. and ... I will still argue, as I have for 5 years now - it would be to our community advantage to eliminate the Shoreline redevelopment district - and replace it with a new 'assessment district'. Otherwise - education and the county will continue to subsidize traffic improvements and other things for that area.


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