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LWV League of Women Voters of California Education Fund
Smart Voter
Alameda County, CA June 6, 2006 Election
Measure I
Business License Fee Increase
City of San Leandro

Majority Approval Required

Pass: 9,782 / 67.4% Yes votes ...... 4,727 / 32.6% No votes

See Also: Index of all Measures

Results as of Jul 17 11:35am, 100.0% of Precincts Reporting (59/59)
Information shown below: Impartial Analysis | Arguments | Full Text

To provide funding for San Leandro's general City services, including police and fire services, senior programs, youth activities, street repairs, park maintenance and library programs and hours, shall an Ordinance amending Section 2-2-500 of the San Leandro Municipal Code to increase the business license fees charged to businesses operating within the City of San Leandro be approved?

Impartial Analysis from San Leandro City Attorney
For many years, the City of San Leandro has required all businesses operating within the City of San Leandro to obtain a business license and pay a fee for that license. The purpose of this program is to both regulate business and to raise revenue for the City.
There are two parts to the business license fee. Businesses are required to pay an annual base fee to obtain the license and also pay unit fees which are calculated in different ways based on the type of business. For instance, some businesses are charged a flat fee, some are charged a fee per-employee and some are charged a fee calculated on the gross receipts that the business receives.
San Leandro's current business license tax rates are set forth in Section 2-2-500 of the San Leandro Municipal Code. These rates are at the same level as they were in 1993. The City of San Leandro has proposed Measure I that would amend Section 2-2-500 of the Municipal Code and increase the City's business license tax rates for all businesses. These increased rates will be levied on existing businesses effective January 1, 2007, unless otherwise specified.
The purpose of Measure I is to help the City manage its continuing budget deficit and to fund a variety of basic City services, which include, but are not limited to police and fire services, senior program, youth activities, street repairs, park maintenance and library programs and hours. A new "parking lot" business license fee category has been added and a rate established for that business activity. Measure I also provides that the fees shall be adjusted annually by an amount equal to the percentage increase in the Consumer Price Index (CPI) for All Urban Consumers for the San Francisco + Oakland + San Jose metropolitan area. Voter approval is not required for annual CPI adjustments.
Because the proceeds from the increase in the business license tax rates will be used for general fund purposes, Measure I requires a majority affirmative ("yes") vote for approval.

s/Jayne W. Williams
City Attorney City of San Leandro

  News and Analysis

The Daily Review

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Arguments For Measure I Arguments Against Measure I
Keep San Leandro vibrant, healthy and prosperous by voting YES on MEASURE I! Measure I authorizes an increase in the San Leandro business license fees paid by businesses operating within San Leandro.
San Leandro's business license rates have not increased in 13 years, and are currently among the lowest in Alameda County. Since 1993, business license revenues have risen only 2%, while the cost of living has risen more than 35%, showing a growing inequity between fees paid and the cost of services provided.
For the fifth straight year, the City of San Leandro faces a multi-million dollar budget shortfall. Continued increases in the City's operating costs + including healthcare, retirement, energy and fuel costs + have far outpaced City revenues, requiring well over $5 million in program cuts to valued City programs, including the Cherry Festival, library hours, recreation programs, street repairs, police investigations, traffic enforcement, animal control, D.A.R.E. programs and school security.
The City wants to minimize the effect of cuts on residents, but the continued shortage now requires the City to either generate additional revenue or make deeper cuts. The City has worked closely with the San Leandro Chamber of Commerce to craft a tax structure that is fair and acceptable to businesses. Strong City programs bene- fit businesses by enhancing the quality of life, improving the local business market and increasing property values. Even with the increase, San Leandro's business license fees will remain among the lowest in Alameda County.
All business license revenues stay in San Leandro and help pay for the quality police, fire, library, youth and senior services that make San Leandro a great place to live, work and do business. Join us in voting YES on MEASURE I. It's better for business and it's better for San Leandro!
s/Shelia Young
s/A.J. Rosenga Jr.
President, Associated Home Owners of San Leandro
s/Jack Papazian
President, San Leandro Chamber of Commerce
s/Tim Holmes
Local Business Owner & Vice President, Broadmoor Neighborhood Association
s/Denise Bownds Kaplan
Chair, San Leandro Library-Historical Commission

Rebuttal to Arguments For
It is troubling when Civic leaders display little insight into the source of San Leandro's fiscal problems. According to San Leandro's budget, SPENDING GREATLY OUTSTRIPPED INFLATION OVER TEN YEARS. MEANWHILE, THE PERCENT SPENT ON PUBLIC SAFETY DECREASED. General Fund analysis concurs.
Politicians habitually drift from core mission focus and favor patronage.
Several examples illustrate.
  • LINKS/Shuttle duplicates AC Transit routes. Nevertheless politicians authorized up to $100,000 preserving a cushy salary for an Ex- Citycouncilman.
  • Years ago the San Leandro Symphony moved major concerts to Castro Valley and deleted San Leandro from its name. Yet, San Leandro still subsidizes.
  • Years ago the Municipal Band became a San Jose union hall operation with a minority of San Leandro musicians. Yet, San Leandro still subsidizes.
  • City officials enjoy sightseeing. 2004-2005 travel related expenditures were $234,277.

Subsidizing political friends, Castro Valley musicians, San Jose unions and generous travel hardly evidence fiscal vigilance. We need to refocus on essentials like Police/Fire rather than increase taxes.
New small businesses suffer most from rising taxes. Many small and home based businesses are on a shoestring budget. Their margin of error is tiny. Every dollar counts. Higher taxes raise the cost of each employee. Aren't businesses and our community improved when limited funds are dedicated to employee salary, technology and Yellow Page advertising rather than political largesse? Vote for fiscal responsibility and small businesses by voting "NO" on nearly tripling business taxes. Stop them before they spend again.
s/Curt Cornell
Chair, Libertarian Party of Alameda County
s/Terry Floyd
Treasurer, Libertarian Party of Alameda County
s/Michael Jacobowitz
Attorney s/Flint Evans President, Lang Engineering
San Leandro does not have a revenue shortfall. San Leandro has a SPENDING CRISIS. After years of overspending beyond the rate of inflation, San Leandro intends to raise business taxes by frightening voters with tales of apocalypse.
City Budget Document section 4.5 contains the Budget's only ten year expenditure table. 1995 total expenditures were $50,968,880. Ten year inflation increased 27%. Population grew 14%. But 2004-05 budgeted City spending has increased 118% to $111,194,000, nearly three times the rate of inflation plus population growth. Remarkably, politicians could have restricted spending addiction to 250% of the rate of inflation plus population growth and still had money left over.
Similarly, five year spending increased 54% while inflation rose 13%. Three year spending increased 23% while inflation rose 8%. Finally hitting the wall, proposed spending decreases in 2006.
Taxpayers have been more than generous with adequate funding for core City missions. 1995 public safety (police and fire) spending was 40% of total expenditures. 2005 public safety spending decreased to less than 30% of expenditures. Incredibly, politicians decreased the percent spent on safety where the public cares most.
Business taxes that are lower than surrounding areas are a City asset rather than pretext for politicians to spend even more. Successful urban districts are those with the lowest taxes and the least bureaucracy. Low-growth cities have tax burdens that are roughly 50 percent above those of high-growth cities. Increased business taxes trends in the wrong direction for our City by steering money from productive business owners in favor of nonessential bureaucracy.
Overspending politicians should return to core functions rather than threaten voters with loss of critical services unless taxes are raised. We should not give them more tax dollars when they so questionably manage funds they already have.

s/Terry Floyd
Treasurer, Libertarian Party of Alameda County
s/Curt Cornell Chair,
Libertarian Party of Alameda County
s/Michael Jacobowitz

Rebuttal to Arguments Against
Measure I will help ensure that residents and businesses receive the municipal services necessary to enhance our economy, improve safety and maintain our quality of life.
Opponents of the business license increase want voters to believe that the City would have money to spare if managed properly. The fact is that San Leandro is one of the leanest-run cities in the area, with a lower budget and employee count per capita than many cities. And contrary to opponents' remarks, San Leandro's public safety funding has doubled over the past decade to nearly $40 million, accounting for 55 percent of General Fund expenditures.
The fact is that San Leandro's business license rates are lower than most neighboring jurisdictions. A mediumsized retailer currently pays $950 in San Leandro, but would pay $6,900 in Hayward and $10,000 in Alameda.
The fact is that operating costs increase yearly (for example, asphalt costs for street repaving have increased by 70 percent this past year), jeopardizing valuable City services.
The City has worked closely with businesses to ensure that the fee increase has minimal impact. The majority of San Leandro businesses value our City services and recognize the need for the increase. What's more, tax rates will remain low even with the increase and do not affect the average citizen.
Why should San Leandro's residents and businesses suffer due to low business license rates? Help keep our city strong. Join San Leandro business and homeowner associations and vote "YES" on Measure I.
s/Shelia Young
s/Henry Deadrich
Business Owner and Resident
s/Denise Bownds Kaplan
Chair, San Leandro Library-Historical Commission

Full Text of Measure I
The proposed ballot measure amending Chapter 2, Title 2, Section 2-2-500 of the San Leandro Municipal Code shall appear and be printed upon the ballots to be used at the Election and shall read as follows:


Every person commencing or carrying on a business within this City shall pay a license fee in an amount determined by the Finance Director in accordance with the nature of the business as hereinafter set forth:

Business ClassificationAnnual Base FeeUnit FeeUnit Fee Basis
Retailing100.0030.00Per Owner/Employee
Wholesaling100.0030.00Per Owner/Employee
Manufacturing100.0030.00Per Owner/Employee
Peddler/Solicitor100.0030.00Per Owner/Employee
Services100.0060.00Per Owner/Employee
Professional100.0075.00Per Owner/Employee
Contractors 100.0060.00Per Owner/Employee
Recreation and Entertainment100.0060.00Per Owner/Employee
Residential Property Rental100.009.00Per Unit or Space
Nonresidential Property Rental100.0015.00Per 1,000 Square Feet
Dance Hall500.00Flat/Annual
Automobile Wrecking500.00Flat/Annual
Christmas Trees/Pumpkin Patch500.00Flat/Annual
Commercial Advertising500.00Flat/Annual
Second-Hand Dealer500.00Flat/Annual
Junk Collector500.00Flat/Annual
Itinerant Merchant 100.0031.00Flat/Weekly
Coin Operated Device100.001.00Per $1,000 of Gross Receipts
Public Utilities100.0030.00Per Owner/Employee
Miscellaneous100.0030.00Per Owner/Employee
Waste Disposal Site100.001.30Per Ton
Towing100.001.00Per $1,000 of Gross Receipts
Firearms Dealer100.003.00Per $100 of Gross Receipts
attributable to the sales
of firearms capable of being
concealed upon the person
and ammunition for such
firearms, excluding sales to
public agencies
Parking Lot100.0030.00Per Parking Space

The business license fees established by this Section shall be adjusted annually by an amount equal to the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco-Oakland-San Jose metropolitan area, as published by the U.S. Department of Labor, Bureau of Statistics."

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