The Palo Alto City Council held a vote on June 20, 2022, to review the proposed business tax measure.   After two hours of discussion, Council Member DuBois moved and seconded by Mayor Burt to:

  • Defer the adoption of a resolution to submit a measure to the voters at the general municipal election on November 8, 2022 to affirm the natural gas utilities transfer until August 1, 2022;
  • Return with a resolution on August 1, 2022, to submit a measure to the voters at the general municipal election on November 8, 2022 to adopt a business tax; and change the tax rate to exempt the first 5,000 square feet, to tax from 5,000-20,000 at $.06 per square feet and 20,001 plus $.12 per square feet per, month.  The initial rate would be effective January 2023 at 50% of the above rate for the first 24 months.
  • Add in a 35-year sunset
  • Remove the CPI roll over
  • Adopt a resolution to inform the public of Council’s spending plan for the business tax proceeds.

Councilmember Cormack joined (for the first time) Councilmember Tanaka in opposing the resolution.

Edesa Bitbadal, Lobbyist for NAIOP Silicon Valley (NAIOPSV), spoke on behalf of the membership during the meeting and clarified certain points about NAIOPSV  organizations and its members’ intentions, stating in part that “NAIOPSV is not an anti-tax organization and is in support of a modest special taxes that would benefit the community such as affordable housing and homelessness.”

Over the last two months, the business coalition which is comprised of SVLG, Palo Alto Chamber and NAIOP SV, has worked on a solution that would not cripple the economy in Palo Alto. The compromise was the largest tax increase and as much as three times larger than any city in Silicon Valley (other than EPA).  The mayor and his allies rejected the offer even though it was the highest tax and also it would have funded the general funds where the City could have spent it on any policy including unfunded liability and hiring staff.

We will keep you updated of the upcoming meeting.  We request all our members to get involved with this tax increase because if square footage tax is passed in Palo Alto at the current format, every city in Silicon Valley and throughout Peninsula will follow suit.

This issue remains the most important issue that will impact our members not only in Palo Alto, but also in the future in other cities.

Do you have questions about public policy? Please contact .