City officials emphasized that the three proposed taxes won't affect the pocketbooks of most Mountain View residents. These ideas include a surcharge on future marijuana sales in the city, a new per-employee fee aimed at the city's largest companies and an increase on the local hotel tax that would help capture short-term rentals like Airbnb. Each of the taxes represent efforts to catch up with businesses that may fall outside of current city regulations.
Exactly how much money the city could gain depends on the details.
In general, the tax on large employers would be the city's attempt to draw more revenues from companies like Google, which are considered to be a major source of regional traffic congestion. Cities such as San Jose have already begun charging businesses $60 per employee if they have more than three workers. If Mountain View adopted similar rules, it would reportedly generate about $3.2 million annually.
It is less clear how much money the city could capture from marijuana sales. San Jose, the only South Bay city that currently permits recreational dispensaries, charges a 10 percent tax on any sales, including deliveries made to other cities. Mountain View could only tax marijuana sales at dispensaries that are established within the city boundaries — currently, there are none. City officials are working on drafting policies to license marijuana dispensaries, but those rules aren't expected to be ready until late this year.
The proposed increase on hotel taxes, also known as a transient occupancy tax, allows Mountain View to follow the example of other nearby cities. Mountain View currently charges a 10 percent tax on local hotels and lodgings, but other cities such as Campbell, Cupertino and Los Gatos charge 12 percent. Palo Alto charges 14 percent, the highest rate in the county.
If Mountain View raised its hotel tax to 12 percent, it would generate about $1.4 million more per year. The city could gain about $1 million annually by extending the tax to short-term rental services. Mountain View has more than 800 rentals listed on Airbnb, which currently avoid paying hotel taxes because they're technically operating illegally.
City Manager Dan Rich said city staff plans to bring formal regulations for short-term rentals before the City Council later this year.
Most of this money would be earmarked for the city's future transportation projects, including a new automated transit system and a series of grade-separation projects along the Caltrain line. Councilman John McAlister, who sits on the Valley Transportation Authority board of directors, said Mountain View needed to find its own solutions to the local traffic problems.
"The VTA is having a tough time with its revenue sources," he said. "Mountain View needs to have a sustainable stream of revenues to help reduce traffic congestion and to make it safer for seniors and children."
Nevertheless, some voters may balk at the city asking for more money during a booming economy. The city manager pointed out that the city had a general fund surplus of about $12 million in the last fiscal year. He underscored that point to dispute recent reports in another local newspaper that indicated Mountain View was sitting on $90 million in unused revenues last year. City finance staff say that figure was drawn from the city's most recent audit, which was looking at all city assets combined, including pensions, property and other funds.
"I can guarantee that we didn't have a $90 million surplus," Rich said. "We did have a (smaller) surplus, but as articulated, the transportation projects that we're looking at will cost hundreds of millions of dollars."
The City Council created a new advisory subcommittee consisting of Mayor Lenny Siegel and councilmen Chris Clark and McAlister to help prepare the tax measures. That subcommittee is expected to help select a polling firm next week, with plans to conduct community polling and surveying in the coming months.
By late March, the plan calls for the city officials to decide which tax proposal to put before voters on the November ballot. The City Council will need to give final approval to place measures on the ballot no later than this summer.
This story contains 743 words.
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