This is an archive of a past election.|
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Business Tax Establishment
City of Solana Beach
Majority Approval Required
Fail: 1,520 / 43.5% Yes votes ...... 1,977 / 56.5% No votes
Index of all Propositions
|Information shown below: Impartial Analysis | Arguments ||
Shall Ordinance No. 404, that establishes and implements a Business Tax in the City of Solana Beach to increase locally-controlled revenue for general City services and operations, including but not limited to law enforcement, fire, parks and recreation, street repairs, and capital improvement program projects, be adopted?
The tax would apply only to businesses that conduct business in Solana Beach as authorized by Government Code section 37101(a). It would not apply to 501(c)(3) non-profit organizations, owners of less than 5 rental residential units, or to residents not engaging in a business in the City.
Under Proposition L, the annual tax rates are:
The annual taxes are calculated based upon business activities during the prior calendar year. Taxes are due on July 1st of each year and delinquent on July 31st. The ordinance has a delayed implementation schedule for 2010 with the first payment due on October 15, 2010 and delinquent on January 15, 2011. In addition, the business tax due for 2010 is reduced and would be charged at 50% of the usual rate.
Proposition L imposes a general tax and will take effect, if passed, by a simple majority (50%+1) of voters casting a vote on the measure.
PREPARED BY: Johanna N. Canlas, City Attorney
City of Solana Beach
San Diego Union-Tribune
|Arguments For Proposition L||Arguments Against Proposition L|
|The economic slowdown has severely impacted our City's ability to provide community services. City revenues are down approximately 14% ($2 million). In addition, the State continues to grab our local dollars to fix their budget. Like you, your city has substantially reduced its budget, cut staff, decreased expenditures approximately 10.5% ($1.2 million), and used reserves to preserve essential community services. Compared to similar cities in our region, Solana Beach uses some of the fewest employees to deliver equivalent services.
Over 90% of cities located in the state utilize a business tax. In San Diego County, Solana Beach is one of only 3 cities without a business tax. Businesses benefit just as residents and visitors do from city provided services.
The Council understands no business wants to pay a tax. However, essential city services + filling potholes, providing sheriff, lifeguard and fire services + must be preserved. The Council proposes a small fair share tax on businesses that ranges from 27 cents to 67.5 cents per $1000 earned in Solana Beach; home-based businesses pay $75 annually; owners of 5 or more apartments pay $25/unit annually ($2/month). This is NOT a tax on consumers or residents. Businesses are being asked to pay their fair share of the cost of services that keep our community a safe and desirable place to live, visit and conduct business.
The City and local business owners, working together developed a business tax that is designed to be fair and simple. In further cooperation with our businesses, recognizing the tough times they are experiencing, Council phased the tax so just 50% of the amount due will be all that's owed the first year, providing approximately $250,000 toward the $2 million revenue shortfall.
Help your city + vote Yes for the Fair Share Business Tax to maintain essential city services.
The City Council and City Manager want you to believe that they have done everything possible to cut spending before proposing this new tax. It's not true. Modifying the city's employee pension program could save hundreds of thousands of dollars every year without affecting the services residents receive.
Far beyond a "few dollars" on a few business and property owners, the true additional cost of this measure will affect many people. Struggling businesses will likely be forced to pass these costs on to customers by raising prices at a time when most people have little left to give. Apartment owners will likely have to raise rents since they will be taxed higher than other businesses. It is misleading to claim this is not ultimately a tax on consumers and residents.
Revenues raised by this measure are not restricted to paying for essential services. Quite the contrary! They could end up paying for employee salary increases or pensions. This has been done in the past following a tax increase. Instead of asking voters to increase taxes, city employees should be asked to contribute a fair share to their own pensions. At most, city employees pay a small fraction to their retirement accounts, while city taxpayers cover the rest + sometimes over 20 times as much! What a deal! No wonder the city would rather increase taxes.
Now is not the time for more taxes. Unemployment exceeds 10%, home values have plummeted, and many Solana Beach businesses are struggling just to keep their doors open.
The City could save nearly as much as it is hoping to raise with this tax by simply requiring its employees to contribute the standard fair share toward their generous pension benefits. Instead, the City wants to first tax small business, the lifeline of our economy.
A tax on businesses could increase the prices of goods, services and housing.
The City's pension costs have more than doubled in the past 10 years. The City (using your tax dollars) pays the majority of retirement contributions, while employees contribute next to nothing. In some cases, employees can receive up to 98% of their highest year salary for life plus annual cost of living increases.
Meanwhile, Solana Beach businesses have had to reduce or eliminate retirement benefits, trim costs, lower salaries, and even lay off employees.
The City's unsustainable pension costs will continue to increase and negatively impact public services. Pension reforms must be adopted before any new taxes will be tolerated.
For no justifiable reason, rental housing and some home+based businesses will be taxed at higher rates than other businesses - meaning they'll unfairly pay more for city services.
Supporters of the tax hike say that Solana Beach is one of only three cities in the county without a business tax. The "everyone+else+is+doing+it" argument does not hold water. This is a harmful tax that will ultimately increase costs for all Solana Beach residents.
We are Solana Beach residents who own and operate businesses in Solana Beach. Why do we support the Fair Share Business Tax? We want to maintain the level of services and quality of life the city provides to all who work and live in Solana Beach.
The City worked closely with local businesses to structure low rates that are fair for both small and large businesses. In fact, our Council devoted an entire public meeting to specifically structure rates to protect small businesses. The City estimates 80% of businesses earn less than $1 million annually and will pay between $50 and $300-a fraction of a penny on dollars earned. Apartment owners of 5 or more units will pay approximately $2/month/unit. These rates are low and comparable to others in the County.
In controlling pension costs, Solana Beach is ahead of many cities in the region. Today, City employees pay a greater percentage of their pension costs than previously. Benefits/wages have been frozen for 2 years. Retirement healthcare benefits have been cut for all employees.
Don't let the signers of the opposition argument fool you: one is a Solana Beach renter; the others don't live, work or own property here. Since when do Solana Beach voters let outsiders hijack our elections? It's about OUR quality of life and level of service.