Voter Guide: Measures P and Q

Measure P raises fees on businesses; Measure Q taxes marijuana sales

Mountain View voters will see two tax initiatives on their Nov. 6 ballots. Measures P and Q -- a business license update and a cannabis tax, respectively -- are both designed to pay for expanding city services without requiring much in the way of sacrifice from residents. If passed, the tax measures are expected to raise somewhere in the neighborhood of $7 million annually, which would help pay for transportation improvements, affordable housing and other services.

Measure P

More than 3,600 licensed businesses are in Mountain View, ranging from flea market merchants to global tech corporations. But regardless of size, almost all businesses are paying roughly the same amount in license fees under the city's current system established more than 60 years ago.

Measure P would update that fee schedule so that license costs are tied to the size of each business. Put simply, big companies would be forced to pay substantially more while small businesses pay less. If approved, the measure is expected to generate about $6 million annually for Mountain View's general fund, which would be put toward future transit improvements and affordable housing.

The proposed tax structure would create a complex tiered fee system, which would only apply to businesses earning more than $5,000 a year. All other businesses would have to pay a flat $75 fee per year. In addition, companies would pay a headcount fee, which would increase with the size of the business. As an example on the lower end, Trader Joe's with its 63 employees would pay up to $75 for each worker, or a total of $1,420. In contrast, Intuit with its 2,100 workers in Mountain View would be charged up to $125 per worker, and the company would be expected to pay about $222,000 annually. A fuller explanation of the tiered tax structure can be found on the city's website, A graphic showing how much each business would pay can be found at the Voice's website.

In a league of its own with more than 23,000 employees in Mountain View, Google is slated for the largest increase by far if the ballot measure passes. The tech giant has paid just under $10,000 a year for dozens of licenses for its various operations around the city. Under the new fee schedule, the company would pay more than $3.5 million annually, or more than half the total fees expected to be collected by the city. This outsized impact on the tech giant has led some to call it the "Google tax."

City officials say the new tax system was designed so that the companies generating the most traffic into Mountain View would have to shoulder the costs of mitigating it. This is appropriate, they say, because most of the revenue would be put toward various transportation projects, including a local automated transit system linking the downtown transit center to North Bayshore, that's being studied by the city.

Google, the Mountain View Chamber of Commerce and the Silicon Valley Leadership Group have all declined to formally oppose Measure P, and no other organized opposition has emerged.

Measure P needs a simple majority to pass. If approved, the measure would be implemented in stages over the next three years.

Measure Q

Passed in 2016, Proposition 64 established California as the latest state to legalize recreational marijuana use. But while about two-thirds of Mountain View voters supported the proposition, until now the city had held off on allowing cannabis retailers to set up shop.

Measure Q is one piece of the city's plan to allow marijuana sales, within limits. If passed, it would establish a tax of up to 9 percent on all cannabis sales, which city officials believe would generate about $1 million for the city's general fund. That tax could be notched down by the City Council, but increasing it higher than 9 percent would require going back to voters.

The first step of the city's plan came just last week. On Oct. 2, the council voted 5-2 to allow two storefront shops and two delivery business to be established within city limits. Those businesses would need to apply for a conditional use permit through the city, and they would be restricted to certain areas of the city. That decision will be formalized in a second vote set for Oct. 23.

Currently, San Jose is the only Santa Clara County city to allow retail cannabis shops, although its dispensaries can deliver to nearby cities, including Mountain View. Campbell is expected to allow marijuana shops starting in April 2019. Most other South Bay cities have opposed local marijuana dispensaries.

While legalization received widespread support among California voters, citizens could be less enthusiastic about having cannabis retailers in their own neighborhoods. In Mountain View, the council's decision to sanction pot sales was met with fierce resistance by some public speakers, who claimed it would bring crime and safety hazards.

Supporters of the measure argue that the tax revenues created by cannabis sales could help fund better public safety and other services.

If approved by a simple majority, the Measure Q tax would be added on top of other fees, including a 15 percent state tax on cannabis sales established as part of Proposition 64. So far, there's been no formal opposition to the tax measure.

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6 people like this
Posted by Proud Taxpayer
a resident of another community
on Oct 12, 2018 at 2:49 pm

Proud Taxpayer is a registered user.

Can somebody tell us what percent tax the city has on all alcohol sales?

4 people like this
Posted by Doug Pearson
a resident of another community
on Oct 12, 2018 at 9:43 pm

Doug Pearson is a registered user.

I checked out the Voice's website mentioned in the Measure P and it seems EVERY business will pay more. It appears based on the Cost Difference graph there, that one business will pay about twice as much, but all others will pay more than 2 times as much. in one case a lot more: One business (presumably Google LLC, with the largest bubble in the "And what the city wants them to pay ..." bubble chart) will pay about 2 million times as much.

The data seems somewhat shaky since the total annual tax will be only about $6 million, and the website mentions "more than 3,600" businesses for an average tax of less than $1667. Also the article's math seems off: "Trader Joe's with its 63 employees would pay up to $75 for each worker, or a total of $1,420." 63 times $75 is $4725. Where does "$1,420" come from? And that's not the only example of strange math I noted.

The story does not say what businesses currently pay but the number of bubbles in the "What businesses pay now ..." graphic is way more than the number of bubbles in the "And what the city wants them to pay ..." graphic.

2 people like this
Posted by Bill H
a resident of Old Mountain View
on Oct 13, 2018 at 7:43 pm

Bill H is a registered user.

Web Link
This graphic is the kind of journalism that make me pay for Mountain View Voice subscription.

2 people like this
Posted by Ever enough Tax?
a resident of Rex Manor
on Oct 14, 2018 at 8:48 pm

Will there ever be enough tax & fees?
It is ALWAYS more...
Even with all the fees generated by development... They still need more.
My msg is not about "what" they are taxing, it is about why is it never enough?

4 people like this
Posted by Mark Noack
a resident of Another Mountain View Neighborhood
on Oct 15, 2018 at 5:09 pm

Hi @Doug,

I wish it were as simple as 63 workers X $75.

The costs tiers are staggered so that each per-employee fee goes up for every worker past certain thresholds. I'll explain.

Trader Joe's has 63 employees. They have to pay a $75 base fee. ($75)

For employees 2 through 25, they have to pay $5 per worker. ($120)

For employees 26 through 50, they have to pay $10 per worker. ($250)

For employees 51 through 63, they have to pay $75 per worker. ($975)

This adds up to $1420.

6 people like this
Posted by Rtan00
a resident of Waverly Park
on Oct 16, 2018 at 10:31 am

Does anyone have data on what the business license fees are in the surrounding cities? $10k does seem like a very small amount for a company as big as Google however raising it to $3.5m seems like a bit of an over correction. (Based on nothing besides the fact that it is a 34,900% increase) Is MV trying to get in line with current rates with a system that makes sense or is this just a short sighted cash grab?

I agree that since google and its employees use a lot of the MV resources they should, through taxes and fees, help maintain and improve them. That said, are there any concerns that such substantial fees will keep large employers out of MV if the licencing fees in the area are substantially lower? Obviously it would be expensive to move headquarters but if the "Google Tax" doesn't exist in other cities in the bay area maybe they begin to look elsewhere. If they do leave, will this all but guarantee that no one will step in and replace them? I understand the need to update an out of date system but gouging our existing businesses seems like it could be a dangerous game. Are business license fees (that end up in the general fund) the best (most appropriate/effective) way to have businesses contribute to MV?

I am not at all trying to cast doubt on the measure but these are genuine questions and concerns that I have. Any additional info/insight would be greatly appreciated.

Like this comment
Posted by kero from near Caltrain
a resident of Another Mountain View Neighborhood
on Nov 3, 2018 at 10:46 am

kero from near Caltrain is a registered user.

@RTan00 The discussion about using the increases in the general fund to pay for transportation seems important and partially answers your question.

- if they want to build any kind of transit link to North Bayshore, that costs money. It'd be hugely valuable for downtown to have it better linked to Google and to near Google.

- if you're one of the people who thinks that building more housing is the only humane choice, to reduce people's commutes both to cut down on wasted time and to reduce traffic overall, than you might also see that increased housing is going to need increased spending on transportation infrastructure.

You may think that if the funding will be used for transportation than it should go into a transportation fund instead of into the general fund, but ballot measures are so permanent that I'm okay with this one being vague on what the money is used for. Hopefully Mountain View is small enough that people can hold council members accountable just via personal relationships with voters (which is kind of how it's supposed to work, but obviously doesn't work at the national level).

Sorry, but further commenting on this topic has been closed.

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